KSE Institute has published a new issue of the Ukraine Risk Matrix – a quarterly analytical product assessing key risks to Ukraine’s economy and resilience amid the full-scale war.

The report covers 12 risks across four areas: real economy, macro-financial stability, external stability, and domestic stability. Each risk is assessed on a scale from 1 to 5, reflecting both the likelihood of materialization and the potential impact.

In Q2 2026, the scores for several important risks facing Ukraine were revised downward. This is primarily due to the unblocking of critical financial support under the €90 billion Ukraine Support Loan. As a result, the risk to Fiscal Position and Budget Execution has been reduced from high to moderate, while the risk to External Financing and Donor Flows has declined from moderate to low.

The score for Geopolitical Risks and War has also been reduced – from very high/critical to high. This reflects frontline stabilization, increasingly effective Ukrainian long-range strikes against Russian military logistics and oil infrastructure, a potential end to the Iran war and related disruptions in global energy markets, and the outcome of the Hungarian elections in April.

Lower scores do not mean that those risks have disappeared. The underlying dynamics remain fragile and highly conditional. The Iran war may keep energy prices higher and even re-escalate. Political dynamics in partner countries are also constantly changing, and upcoming elections and corresponding political turbulence in key countries may complicate support for Ukraine.

The continued destruction of critical infrastructure remains the single most important risk driver. It constrains production and logistics, weighs on fiscal revenues, holds back investment, and undermines business confidence. The preparation for the next winter during summer and early autumn is a key factor in softening the risk, or, conversely, escalating it. 

In the real economy, KSE Institute assesses Economic Activity at 4 out of 5, Recovery and Investment at 3 out of 5, and Critical Infrastructure at 4 out of 5. Economic activity remains under pressure from energy and logistics disruptions, an acute labor deficit, higher energy and fuel costs, and weak investment activity. At the same time, consumer demand remains relatively resilient and continues to partly support the economy.

In macro-financial stability, Fiscal Position and Budget Execution is assessed at 3 out of 5, Inflation and Monetary Stability at 3 out of 5, and Banking and Financial Stability at 3 out of 5. The unblocking of the Ukraine Support Loan has reduced short-term budgetary pressure. However, the budget remains structurally dependent on external financing, while defense, infrastructure recovery, and social needs continue to lock in elevated spending. If the active phase of the war continues into 2027, financing needs will rise, and Ukraine may require additional support.

In external stability, External Financing and Donor Flows is assessed at 2 out of 5, Trade and External Dynamics at 4 out of 5, and Geopolitical Risks and War at 4 out of 5. External financing now appears much less risky, provided pledged aid arrives on schedule. By contrast, the trade deficit is becoming increasingly persistent: the war continues to weigh on exports, while defense needs, reconstruction, and energy imports keep import demand high.

In domestic stability, Reform Momentum is assessed at 3 out of 5, Social Stability at 3 out of 5, and Political Stability at 2 out of 5. Ukraine continues to pass important legislation under the Ukraine Facility and EU integration tracks. At the same time, support for key decisions in parliament requires growing political coordination. Some important commitments, including tax reform benchmarks under the IMF program, remain difficult to deliver. Social risks remain manageable for now. However, the different experiences of the war across social groups, the needs of military service, the return of Ukrainians from abroad, and the possible attraction of foreign workers may gradually become more sensitive issues.

The report also shows that these risks do not exist in isolation. The continuation of the war remains the main factor transmitting pressure to the economy, the budget, external financing, investment, and social stability.

Overall, the new Ukraine Risk Matrix shows that Ukraine has gained greater certainty regarding its budget and external financing, improving the risk landscape. However, the country’s resilience still depends on the course of the war, the condition of critical infrastructure, the timely arrival of external support, the ability to mobilize private capital, and the preservation of human capital.