A year ago, Ukraine’s economy was on a strong footing, with a debt-to-GDP of less than 50% and a budget deficit of 3.5%. Then came Feb. 24, and with it a full-scale war. We were in a new reality, with very different financial needs.
Funds that should have been directed toward environmental, social, and corporate-governance goals, sustainable development, and strengthening the country’s competitiveness were redirected to defense, humanitarian purposes, and support for people affected by the war. And in 2023, about 50% of the state budget is allocated to national security and defense.
Months of war have transformed Ukraine from a country with stable and promising financial indicators to one that is directing all resources to the struggle while battling severe economic consequences: 30% economic decline, inflation around 28%,…