KSE Institute has released the September 2026 edition of the Ukraine Monthly Economic Update, covering key data for July-August and developments through September 25. In July, the port blockade cut exports; by September, missile strikes had taken plants accounting for around 90% of the country’s steelmaking capacity offline, so reopening the ports would no longer restore output. Goods exports fell 7.1% year-on-year to USD 2.9 billion in July, the first annual decline this year, and the trade deficit reached USD 6.0 billion, the largest monthly gap of 2026. Customs data indicate that exports fell further in August, to around USD 2.5 billion.

The hryvnia strengthened in August, but the report finds that the gain was supported by NBU interventions against a deteriorating market. The client-market deficit remained near its record at USD 3.5 billion, household net FX demand rose 38% month-on-month, and net interventions reached USD 4.8 billion, even as the exchange rate appreciated. International reserves fell 5.0% to USD 48.7 billion, and the current account was close to balance in July only because official transfers to the government reached USD 5.3 billion.

The fiscal constraint has moved from revenue collection to cash. General fund revenues reached UAH 227.8 billion in August, or 93.6% of the monthly plan; expenditures totaled UAH 390 billion; the deficit was about UAH 163 billion; and borrowing provided only UAH 36.8 billion. Government deposits at the NBU fell by 47% to UAH 375 billion in one month, so the financing of Q4 spending now depends on when the MFA and Ukraine Facility tranches arrive. The parcel-tax bill, a condition for the EUR 3.7 billion second MFA tranche, passed first reading on September 16 after failing on September 1.

Inflation accelerated to 8.1% year-on-year in August from 7.7% in July, and core inflation stayed at 8.1% for a third consecutive month. KSE Institute’s seasonally adjusted estimates put annualized headline inflation at 10.2%, well above the headline print, and one-year household inflation expectations jumped to 14.1% from 10.0%.

On September 17, the NBU raised its key policy rate by another 0.5 percentage points to 16%, but the report finds that transmission to market rates remains weak: after two hikes totaling 1 percentage point, the three-month certificate of deposit rate is only 0.31 points above its pre-July level, and new deposit rates have not moved. Net loans reached UAH 1.32 trillion in August, up 34% year-on-year, while deposits grew by only 0.1% over the month as households moved into foreign-currency deposits and government bonds.

Industrial output fell 1.7% year-on-year in July, steel production dropped 57.3% year-on-year in August, and real GDP growth in Q2 2026 was revised down to 0.4% from 0.6%. Vacancies were 5.5% lower year-on-year in early September as employers cut staff after losing warehouses and plants, while firms still report growing difficulty finding workers, so wage pressure persists even as hiring falls. With export receipts falling, energy import needs rising ahead of the heating season, and the Treasury’s buffer spent down, the economy enters the autumn dependent on the timing of partner disbursements, and on the reforms they are conditioned on.