Digests • 15 October 2025
On September 15, the Government of Ukraine presented the war budget for the entire year of 2026. More details on the 2026 budget can be found in this digest.
As of September 1, 2025, the public debt reached USD 192 billion. According to the Ministry of Finance’s forecast, public debt is expected to reach USD 240 billion by the end of 2026.
In September 2025, international reserves increased from USD 46.0 to USD 46.5 billion.
The State Statistics Service of Ukraine (Ukrstat) released its estimate of Ukraine’s GDP growth for the second quarter of 2025 — 0.8%. For the third consecutive quarter, the Ukrainian economy has shown growth below 1%.
Source: Ukrstat.
Figure translation
Change in Real GDP
% compared to the corresponding quarter of the previous year
(Data from the preliminary estimate of GDP for Q2 2025)
When presenting the 2026 budget, the Government of Ukraine estimated GDP growth for 2025 at 2.7%, and revised the 2026 GDP growth forecast down to 2.4%.
Consumer prices in September 2025 increased by 0.3% compared to August, and by 11.9% compared to September 2024.
Core inflation in September 2025 amounted to 1.3% compared to August, and 11.0% compared to September 2024.
Changes in prices over the last 12 months. Source: Ukrstat.
Figure translation
Change in prices
(in % to the previous month)
2024 September October November December 2025 January February March April May June July August September
-o- CPI -A- Core CPI
Change in prices
(in % to the previous year)
-o- CPI -A- Core CPI
In the consumer market in September, prices for food and non-alcoholic beverages decreased by 0.8%. The largest declines were recorded for fruits (–11.8%) and vegetables (–10.6%). Prices for eggs, sugar, and rice fell by 2.9–1.3%.
At the same time, prices increased by 0.7–4.0% for lard, sunflower oil, fish and fish products, dairy products, meat and meat products, processed grains, non-alcoholic beverages, bread, and butter.
Prices for alcoholic beverages and tobacco products rose by 1.2%, including tobacco products – by 1.4% and alcoholic beverages – by 1.0%.
Clothing and footwear prices increased by 8.2%, including clothing – by 9.1% and footwear – by 7.3%.
Education services rose in price by 12.4%, including higher education – by 16.8% and secondary education – by 8.5%.
The consolidated budget for January–August 2025 recorded a deficit of UAH 768.7 billion, compared to UAH 612.4 billion during the same period in 2024. The 2025 deficit exceeded the previous year’s figure due to a large inflow of grants in August 2024 (over UAH 200 billion).
Tax revenues in 2025 are already UAH 305.4 billion higher than in 2024.
At the same time, the state budget deficit for January–August 2025 amounted to UAH 827.7 billion, while local budgets recorded a surplus of UAH 59.0 billion.
In September 2025, Ukraine received external financing from the following sources:
As of September 1, 2025, state and local budget accounts held UAH 465 billion, sufficient to cover 2–3 months of budget expenditures without external assistance.
As of September 1, 2025, Ukraine’s public and government-guaranteed debt stood at USD 192.71 billion (+ USD 6.58 billion month-on-month).
The increase was primarily due to EU financing in August 2025.
On September 15, the Government of Ukraine presented the 2026 budget.
Expenditures on security (defense + internal security) were increased by UAH 600 billion. The higher defense spending in the UIF forecast for 2025 reflects an additional UAH 700 billion in military products transferred to the budget, which are not included in the Ministry of Finance’s 2026 draft.
The 2026 exchange rate is not specified in the budget note, but the Budget Declaration estimates nominal GDP at USD 231 billion. Western financing (around USD 44.9 billion) will strongly influence exchange rate policy.
The Cabinet of Ministers forecasts a trade deficit of USD 44.5 billion in 2026, compared to USD 40.4 billion expected in 2025. UIF estimates the 2025 deficit at USD 52–54 billion.
The minimum wage will rise from UAH 8,000 to 8,647, and the subsistence minimum from UAH 2,944 to 3,209 (+9%). The average salary is expected to grow from UAH 25,000 to 30,000. Forecasted inflation is at 9.9%, economic growth – 2.4%.
New revenue sources include:
Fuel excise will rise from EUR 271 to EUR 300 per ton of gasoline, and tobacco excise from EUR 78 to EUR 82 per 1,000 cigarettes. The elevated military levy will remain.
The Ministry of Finance projects consolidated revenues to grow by UAH 672 billion. Optimistic VAT projections could be offset by higher PIT and SSC receipts, assuming 20% wage growth. Notably, local tax revenues are expected to rise significantly.
Beyond security spending, allocations for education, utilities, sports, and culture are set to increase. The Ministry of Finance included substantial reserve funds — UAH 200 billion for security and UAH 35 billion for other purposes. Total public spending will increase by UAH 1.1 trillion compared to the 2025 base budget.
According to the Ministry of Finance, public debt is projected to exceed USD 240 billion (106% of GDP) by the end of 2026, requiring close monitoring of debt sustainability.
The consolidated budget deficit is projected at UAH 1.914 trillion (18.6% of GDP). The actual figure may be lower due to U.S. ERA grants worth UAH 424 billion, not yet reflected in the revenue plan.
The National Bank of Ukraine is expected to transfer UAH 146 billion in profit from 2025 to the 2026 budget, depending on foreign exchange regulation outcomes.
Consolidated Budget for 2021-2026. Source: Ministry of Finance, UIF calculations.
Consolidated budget for 2021-2026, % of GDP.
Source: Ministry of Finance, UIF calculations.
In August 2025, the balance of payments was positive (+ USD 3.0 billion), mainly due to over USD 5.7 billion in partner financing.
The trade deficit for January–August 2025 reached a record USD 34.3 billion, USD 10.3 billion higher than the same period in 2024.
A new trend has emerged — the growth of trade credit inflows into the economy. In August, this figure reached USD 1.031 billion, and since the start of 2025 totaled USD 4.376 billion, more than double the USD 2.045 billion recorded in 2024.
Foreign direct investment (FDI) remains low. In August, Ukraine received USD 173 million in FDI, half of which were reinvestments.
From January–August 2025, total FDI inflows amounted to USD 1.436 billion, compared to USD 3.386 billion in 2024.
Against the backdrop of higher-than-expected inflation, the NBU continues to restrain devaluation to control prices. As projected in the previous digest, in September, the NBU maintained the rate within UAH 41.0–41.5 per USD.
Hryvnia exchange rate to the US dollar and the euro over the past 12 months. Source: NBU.
Following the U.S. Federal Reserve’s September 17 meeting, which lowered interest rates, the EUR/USD rate stabilized at 1.17.
We expect the NBU to continue holding the USD/UAH rate steady in October, minimizing inflationary pressures.
Our forecast: UAH 41.0–42.0 per USD and UAH 48–49 per EUR in October.
In September 2025, international reserves increased from USD 46.0 billion to USD 46.5 billion.
The NBU sold USD 2.2915 billion and purchased USD 1.7 million, resulting in net foreign currency sales of USD 2.2898 billion.
In September, government accounts at the NBU received USD 2.9 billion, including:
Ukraine paid USD 563.6 million for foreign debt service and repayment, including:
Additionally, USD 254.4 million was paid to the IMF.
The current level of international reserves covers 5.1 months of future imports.
Changes in international reserves over the past 12 months. Source: NBU.
October 23 – NBU decision on the key interest rate.
October 30 – NBU Inflation Report for Q4 2025.
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