Executive summary
• According to the IER estimates, in June GDP growth continued to decelerate: from 3.2% yoy in May to 2.7% yoy in June - due to problems with access to electricity, which are the result of damage to electricity generation by russian drones and missiles.
• The shortage of electricity remains very acute. Due to the uneven consumption during the day peak hours, the deficit can reach 25-30%. Electricity imports have reached their maximum capacity.
• Ukraine and the EU have extended the “transport visa-free regime” until 2025. In June, cargo handling by seaports increased by 30% yoy to 6.7 m tons.
• Exports in June, according to customs, decreased significantly compared to previous months, while imports remained almost unchanged compared to May.
• Expenditure performance deteriorated in June, most likely due to minimal external borrowing in May and lower than expected external borrowing in June.
• In May, the Government received EUR 1.9 bn from the EU under the Ukraine Facility, but the money from the IMF did not arrive until July.
• Ukraine fulfilled timely all the indicators of the Ukraine Plan, which were to be implemented by the end of the 2nd quarter of 2024. Accordingly, the next tranche of the loan from the EU should arrive in August.
• In June, inflation accelerated to 4.8% yoy due to higher electricity tariffs.
• The NBU is considering further key policy rate cuts in the second half of 2024.
• The hryvnia exchange rate exceeded UAH 41 per USD on the back of a high trade deficit and high demand for cash currency.