KSE Institute has published the June Ukraine Monthly Economic Update, covering data for April-May 2026. In May, the exchange rate was relatively stable at UAH 44.1 per US dollar and around UAH 51.5 per euro. However, on June 8-10, the hryvnia weakened by about 1.6% on the interbank market to UAH 45.1, driven by a surge in government spending and excess hryvnia liquidity in banks. The NBU sold $1.2-1.4 billion over the week, the highest level since December 2024. 

Before that, NBU sold foreign currency quite actively, and reserves declined by $2.5 billion in May to $45.7 billion, as an answer to the growing trade deficit, which reached $20.8 billion in April, up $7 billion, or 51%, compared with last year, and continues growing according to the near-term estimates. Exports grew by only 4% in April, mainly due to the agricultural sector, while imports surged by 29%. The largest increase was in machinery and equipment purchases, which rose by 42% to $3.8 billion, driven by defense needs, reconstruction, and investment.

In May, budget revenues rose to UAH 319 billion, or 129% of the target, but mainly due to a one-off transfer of NBU profits totaling UAH 73.1 billion, masking a decline in tax revenues that reflects worse activity. Expenditures reached UAH 450 billion, exceeding initial benchmarks for the third consecutive month.

Inflation slowed to 8.2% in May, down from 8.6% in April, due to seasonal price declines of 15.3% for eggs and 1.7% for vegetables. However, core inflation rose to 7.9%, and price pressures remain strong. Fuel prices increased by 38.7% year on year, transport services by 22.6%, restaurants and hotels by 13.8%, and food by 10.4%.

In June, the NBU kept its key policy rate unchanged at 15%. The banking system remains stable: average excess liquidity increased to UAH 937 billion, regulatory capital is ~1.8 times the minimum requirement, and return on equity is ~22%. Lending is recovering: net hryvnia loans to businesses rose by 31% year on year, while loans to households increased by 36%. At the same time, the real return on hryvnia deposits has almost disappeared.

In the production sector, industrial output grew by only 1.2% in April; energy fell by 10.7% and metallurgy by 16.6%, while machinery grew by 30.6% and metal products by 22%.