Since March 2022, the Centre for Economic Strategy (CES) has been preparing monthly reviews of Ukraine’s economy during a full-scale war. The special topic of the November review is: «State budget for 2026: will Ukraine have enough money?».
All previous reviews can be found under the link.
Key changes in the Ukrainian economy in December:
- Monetary sector: Inflation decreased to 9.3% y-o-y, with disinflation stronger than both NBU and private forecasts. Food inflation continues to ease due to high harvest surpluses and lack of storage. Core inflation eased more slowly while inflation expectations remain in the double digits. In its December decision, the NBU held its key policy rate at 15.5% in face of foreign funding uncertainties. The corporate credit growth is record high.
- Sectoral analysis: Real GDP growth accelerated to 2.1% y-o-y in Q3 2025, driven by government consumption and investment. The economy was also supported by steady consumer demand and a stable energy situation. However, the situation in the energy sector essentially deteriorated in Q4 2025 and has since had a restraining effect on the economy, while the pace of harvesting has accelerated, supporting agricultural production.
- Special topic: Budget-2026. Internal revenues are not high enough: even with nominal deficit of 18.5% of GDP expenditures are underfunded. Ukraine is maximising budget revenue collection: own revenues will increase by 121% in 2026 compared to 2021. War expenditures remain a budgetary priority. In 2025, war expenditures are expected to be 32% higher than in 2024. But in 2026 not enough money budgeted for the war and less than in 2025. This is accompanied by an expected increase in non-defence spending. Still, spending grows only nominally: non-military expenditures are effectively frozen while war spending is insufficient.
See our report below for further details.
Panelists:
- Olena Bilanchief economist at Dragon Capital investment company and member of the CES supervisory board.
- Roksolana Pidlasachairman of the budget committee of the Verkhovna Rada.
- Natallia Pipasecretary of committee on education, science and innovations of the Verkhovna Rada.
Moderator: Hlib VyshinskyExecutive Director, Centre for Economic Strategy.
This event has been funded by UK International Development from the UK government; however, the views expressed do not necessarily reflect the UK government’s official policies.
