Key economic indicators for Ukraine and the world as of late July — early August

Maksym Urakin, Director of Development and Marketing at Interfax-Ukraine, PhD in Economics and founder of the Experts Club information and analytical centre, has presented an overview of the main trends that shaped the Ukrainian and global economies over the first seven months of 2026, Interfax-Ukraine reports.

Key points:

• Ukraine’s real GDP grew by only 0.4% year on year in Q2 2026;
• annual inflation accelerated to 7.7% in July, and the National Bank raised its key policy rate to 15.5%;
• the goods trade deficit widened to about $34 billion in January–July;
• agricultural output rose 17.2% in January–July.

The article presents key macroeconomic indicators for Ukraine and the global economy as of the end of July 2026. The analysis is based on data from the State Statistics Service of Ukraine, the National Bank of Ukraine, the Ministry of Finance, the State Customs Service, the International Monetary Fund, Eurostat, BEA, BLS, the US Federal Reserve, the European Central Bank, ONS, NBS, TurkStat, IBGE and other official institutions. Statistics published after the end of the reporting period were also used for July and Q2 indicators.

Ukraine’s macroeconomic indicators

As of the end of July 2026, Ukraine’s economy maintained relative macro-financial stability amid the full-scale war, but the pace of recovery remained slow. After contracting early in the year, real GDP returned to weak growth, but inflation risks increased, prompting the National Bank to raise its key policy rate for the first time in several months. International reserves remained near $51.2 billion after a sharp increase in June, while the goods trade deficit widened to about $34 billion in January–July.

The main features of the economic situation were high defence spending, the budget’s dependence on international financing, further import growth, labour shortages and significant business costs for energy and logistics. At the same time, continued financial support from partners, business adaptability and the gradual recovery of agricultural production created preconditions for a pick-up in economic activity in the second half of the year.

GDP

According to the State Statistics Service’s preliminary estimate, real GDP grew by 0.4% in Q2 2026 compared with the same quarter of 2025. Seasonally adjusted, the economy grew 0.3% quarter on quarter. Nominal GDP stood at UAH 2,305.7 billion. These data were published on 9 September, after the end of the reporting period.

After a 0.6% year-on-year contraction in Q1, the economy thus returned to positive growth. However, growth of less than half a percent effectively meant near-stagnation, and the recovery remained uneven across sectors.

On 30 July, the National Bank revised its 2026 real GDP growth forecast from 1.3% to 1.8%. The regulator expected looser fiscal policy, localisation of defence production and larger harvests to support economic activity in the second half of the year. Growth was forecast to accelerate to about 2.8–3% a year in 2027–2028.

At the same time, the NBU noted that destruction of production capacity, energy facilities and logistics infrastructure continues to constrain domestic output. Shortages of skilled workers, security risks and insufficient private investment also remained important constraints.

Inflation

The inflation situation worsened in July compared with June. According to the State Statistics Service, consumer prices rose 0.3% month on month after falling 0.1% in June. Annual inflation accelerated from 7.2% to 7.7%. Compared with December 2025, consumer prices rose 6.0%.

Core inflation stood at 8.1% year on year in July, unchanged from June. Month on month, core prices rose 0.3% versus 0.5% a month earlier. Headline inflation thus accelerated, while underlying price pressure remained relatively stable, though above the headline index.

According to the National Bank, raw food prices in July were 2.2% higher than a year earlier. Processed food inflation slowed to 10%, while services inflation remained high at 13.7%. Some transport services and housing rents rose faster.

Administered prices rose 11.8% year on year, driven by higher tariffs for water supply, sewerage and public transport in a number of cities. Annual fuel price growth slowed to 28.0% from 33.4% in June, although petrol and diesel began rising again in the second half of July due to changes in global oil prices.

The main drivers of inflationary pressure remained business costs for energy, wages and logistics. Infrastructure damage, labour shortages and the need to finance backup power sources had an additional impact.

The NBU also signalled a possible further increase in the key rate to 16% in Q4 2026. A return to monetary easing was not expected before Q2 2027, provided inflationary pressure eases.

«July showed that Ukrainian inflation remains primarily a problem of high production costs. Even with relatively moderate monthly price growth, core inflation exceeds 8%, services are rising by almost 14%, and fuel by more than a quarter over the year. Raising the key rate to 15.5% should contain second-round inflation effects and support hryvnia savings, but a long-term decline in inflation is impossible without stabilising energy, logistics and production costs», Urakin stressed.

International reserves

After a significant increase in reserves in June, the foreign exchange sector showed relative stability. According to preliminary NBU data, Ukraine’s international reserves stood at $51.199 billion as of 1 August 2026, down $70.4 million, or 0.1%, during July.

After rising 12.1% in June to $51.269 billion, reserves were thus virtually unchanged in July. At the same time, the structure of flows indicated continued strong demand for foreign currency.

In July, the National Bank sold about $4.76 billion on the foreign exchange market. Meanwhile, the government’s foreign currency accounts at the NBU received about $1.64 billion, including $683.3 million from the International Monetary Fund, $498.7 million via World Bank accounts and $458.6 million from the placement of foreign-currency domestic government bonds.

Reserves were also affected by government debt payments, the conversion of foreign currency proceeds received under external financing and revaluation of reserve assets. Net international reserves fell by about $669 million, or 1.8%, to $36.3 billion in July. Total international reserves covered about 4.2 months of future imports.

In its July macroeconomic forecast, the NBU raised its expected international reserves at the end of 2026 to $69.7 billion. Reserves were forecast at $73.7 billion at the end of 2027 and about $70 billion at the end of 2028. Meeting these targets depended on the timely arrival of large-scale international financial support.

«Keeping international reserves near $51 billion is an important stabilising factor for the foreign exchange market. However, the National Bank’s sale of almost $4.8 billion in a single month shows that the structural foreign currency deficit remains significant. Ukraine has sufficient external liquidity for current stabilisation, but without growth in exports of goods and services this resource cannot become the basis for long-term economic development», Urakin believes.

Foreign trade

Foreign trade remained one of the main sources of macroeconomic imbalances. According to the State Customs Service, goods turnover in January–July 2026 totalled $82.2 billion. Imports reached $58.1 billion and exports $24.1 billion, giving a seven-month goods trade deficit of about $34 billion. Compared with the first half of the year, when the deficit was about $28.3 billion, it grew by $5.7 billion. Imports exceeded exports by about 2.41 times.

In July alone, imports grew by about $8.8 billion and exports by only $3.1 billion, reflecting the economy’s continued high import dependence in wartime.

China remained the largest supplier of goods to Ukraine, with $16.8 billion of imports in January–July, or about 28.9% of total goods imports. Poland ($5.5 billion) and Germany ($3.8 billion) followed.

The main export destinations remained Poland ($2.8 billion), Türkiye ($2 billion) and Germany ($1.5 billion).

Machinery, equipment and vehicles accounted for the largest share of imports at $25.7 billion. Fuel and energy imports totalled $8.5 billion and chemical products $8 billion. Together, these three categories made up about 73% of all goods imports.

The high share of machinery and equipment reflected the needs of the defence sector, energy, transport and investment projects. At the same time, the import structure also pointed to insufficient domestic production of some industrial goods and components.

Food products accounted for the bulk of Ukraine’s goods exports at $14.1 billion, or about 58.5% of the total. Exports of metals and metal products totalled $2.5 billion, and machinery, equipment and vehicles $2.1 billion.

This structure confirmed Ukraine’s continued high dependence on agricultural and raw material exports. The share of high value-added products remained insufficient to offset rapidly growing import needs.

«A $34 billion goods trade deficit over seven months is one of the key structural challenges for the Ukrainian economy. A significant part of imports is necessary for defence, energy and infrastructure reconstruction. At the same time, imported equipment must translate into new production capacity, higher productivity and export growth. Otherwise, the trade gap will continue to be financed mainly by international aid», Urakin stressed.

State budget and debt

The budget situation in July remained tense but manageable thanks to large-scale external financing. According to the Ministry of Finance, the general fund of the state budget received UAH 2.06 trillion in January–July 2026.

Total revenues to the general and special funds amounted to about UAH 3.25 trillion. Cash expenditures of the state budget over seven months reached UAH 3.43 trillion, including UAH 2.58 trillion from the general fund.

In July alone, the general fund received UAH 165.8 billion, while general fund cash expenditures totalled UAH 345.9 billion.

International grant aid credited to the general fund in January–July amounted to UAH 569.6 billion. A further UAH 146.1 billion came from the transfer of part of the National Bank’s profit. International support and special revenues thus remained important components of budget resilience.

Security and defence remained the main area of budget spending, at UAH 1.63 trillion over seven months, or 63.2% of total general fund expenditures. In July, such spending amounted to UAH 222.5 billion.

Public sector wages with payroll charges totalled UAH 993.5 billion in January–July, subsidies and current transfers to enterprises UAH 424.9 billion, and social security UAH 410.9 billion. Spending on goods and services reached UAH 319 billion.

Public debt servicing cost UAH 200.7 billion, and transfers to local budgets UAH 162.4 billion.

Actual government borrowing to the general fund over seven months totalled UAH 607.9 billion: UAH 299.4 billion from domestic sources and UAH 308.5 billion from external sources. Public debt repayments over the period amounted to UAH 335.5 billion.

From 1 July 2026, amendments to budget legislation came into force under which military levy revenues go to the special fund of the state budget to pay Armed Forces personnel. In July, the fund received UAH 17.9 billion in military levy.

As of 31 July, Ukraine’s public and publicly guaranteed debt stood at UAH 9.572 trillion, or about $214.18 billion, up UAH 81.3 billion over the month.

External liabilities made up the bulk of the debt portfolio. Public external debt stood at UAH 7.3 trillion, domestic debt at UAH 2.01 trillion and state-guaranteed debt at UAH 261.1 billion.

A positive factor remained the largely concessional structure of government borrowing. About 64.4% of the debt portfolio came from international financial institutions and foreign governments. The weighted average interest rate on public debt fell to 4.40% at the end of July, with a weighted average maturity of 13.06 years.

«Ukraine’s budget model remains a wartime one in its structure. More than 63% of general fund spending goes to security and defence, while civilian programmes depend heavily on international financing. At the same time, rising public debt is not in itself the main risk if financing remains long-term and concessional. The key question is whether budget spending and external aid create conditions for expanding future economic potential», Maksym Urakin noted.

Labour market

The labour market situation remained mixed. On the one hand, employers continued to report shortages of skilled workers, especially in industry, construction, logistics and technical professions. On the other, structural unemployment remained significant due to regional imbalances, forced migration and skills mismatches.

According to the State Statistics Service, the average nominal wage of a full-time employee in July 2026 was UAH 32,243, up 21.7% on July 2025 but down 1.6% on June 2026.

Nominal wage growth significantly exceeded annual consumer inflation, indicating rising real wages in the sector covered by statistics, although the overall income situation remained uneven.

In its July forecast, the National Bank expected unemployment to fall to about 10% in 2026 and to around 9% in 2027–2028, with real wages forecast to rise by more than 12% in 2026.

Agriculture

July brought a marked improvement in agricultural output. According to the State Statistics Service, agricultural production in January–July 2026 rose 17.2% year on year.

This was a significant change from the first half of the year, when agricultural output fell 1.6%. The positive trend was driven primarily by the new harvest and increased crop production.

At the same time, shifts in harvest timing, weather conditions and a low comparison base had a significant impact on the sector’s results. The sharp acceleration in July should therefore not automatically be interpreted as a long-term increase in agricultural productivity.

Agriculture remained a key source of goods exports, foreign currency earnings and food security. However, investment in processing, storage, transport infrastructure and logistics remained necessary to increase its economic impact.

The global economy

The global economy remained relatively resilient at the end of July 2026, but its development was accompanied by high geopolitical uncertainty, energy risks and uneven inflation dynamics. The conflict in the Middle East continued to affect energy markets, while investment in artificial intelligence, digital technologies and industrial automation supported economic activity in several leading economies.

In its July World Economic Outlook update, published on 8 July, the International Monetary Fund forecast global growth of 3.0% in 2026 and 3.4% in 2027.

Compared with its April estimates, the forecast implied slightly weaker growth this year but a faster recovery next year. The IMF stressed that the global economy is influenced by two opposing factors: a negative energy shock caused by war and a positive technology boost linked to artificial intelligence.

Global disinflation, under way since 2024, effectively stalled. The IMF raised its 2026 global inflation forecast to 4.7%. The main risks remained further escalation of military conflicts, rising trade tensions, tighter financial conditions and growing public debt.

At the same time, technology investment created additional opportunities for economies integrated into global supply chains for semiconductors, electronics, digital equipment and software.

United States

The US economy continued to grow in Q2 2026, though at a slower pace. According to the Bureau of Economic Analysis’s advance estimate of 30 July, real GDP grew at an annualised rate of 1.5%, down from 2.1% in Q1. In regular quarterly terms, growth was about 0.4%.

Consumer spending, investment and exports made the main positive contributions, while lower government spending and higher imports weighed on the overall result.

A feature of the economic situation remained growing private investment in technology, including data centres, digital infrastructure and artificial intelligence equipment.

US consumer inflation slowed in July. According to the Bureau of Labor Statistics, the CPI rose 3.4% year on year, down from 3.5% in June.

Seasonally adjusted, consumer prices rose just 0.1% month on month after falling 0.4% in June. Core inflation, excluding food and energy, was 2.5% year on year, down from 2.6% a month earlier.

Energy remained 14.7% more expensive than in July 2025, although the energy index fell 1.5% over the month. Food inflation was 3.0% year on year.

On 29 July, the US Federal Reserve kept the federal funds target range at 3.50–3.75%. Nine members of the Federal Open Market Committee supported the decision, while three favoured a 25 basis point hike.

The Fed noted that economic activity continues to expand at a solid pace and the labour market remains relatively stable. However, inflation was still above the 2% target, limiting room for monetary easing.

Eurozone

The European economy showed a moderate recovery in Q2. According to Eurostat’s preliminary flash estimate of 30 July, real GDP in the eurozone grew 0.4% quarter on quarter and in the European Union 0.5%. Year on year, growth was 1.0% and 1.2% respectively.

Revisions published in September raised quarterly growth to 0.6% in the eurozone and 0.7% in the European Union, with annual growth revised to 1.2% and 1.4% respectively.

The European economy thus showed improving momentum, but growth remained moderate due to high energy costs, trade risks and structural problems in industry.

According to Eurostat’s flash estimate of 31 July, annual eurozone inflation rose to 2.9% from 2.8% in June, a figure confirmed by final data. EU inflation was 3.0%.

Higher energy prices were the main driver, rising 10.0% year on year according to the flash estimate, up from 8.5% in June. Services inflation accelerated to 3.3% and non-energy industrial goods to 0.9%.

Meanwhile, food, alcohol and tobacco price growth slowed to 1.2%. Core inflation excluding energy, food, alcohol and tobacco was about 2.5%.

On 23 July, the European Central Bank left all three key interest rates unchanged: the deposit rate at 2.25%, the main refinancing rate at 2.40% and the marginal lending rate at 2.65%.

The ECB stressed that further decisions will depend on inflation risks, the impact of the energy shock and economic developments, noting that the full effect of higher energy prices had not yet materialised in the European economy.

United Kingdom

Inflationary pressure also increased in the UK in July. According to the Office for National Statistics, consumer inflation was 2.9% year on year, up from 2.6% in June, with prices up 0.3% over the month.

Core inflation remained at 2.6%, while services inflation slowed to 3.4%. Housing and household services and some non-food goods made the main contribution to the acceleration.

According to the ONS preliminary estimate, UK real GDP grew 0.4% quarter on quarter in Q2 2026 after 0.6% growth in Q1. Services, up 0.5%, made the main contribution; construction added 0.3%, while industrial production was flat.

On 30 July, the Bank of England kept Bank Rate at 3.75%. Six Monetary Policy Committee members voted to hold, while three favoured a rise to 4%.

«July showed that the major central banks continue to act cautiously. The Federal Reserve and the European Central Bank kept interest rates unchanged, as did the Bank of England. Meanwhile, inflation slowed to 3.4% in the US but accelerated in the eurozone and the UK. Such divergent dynamics mean the global cost of capital will remain relatively high, and Ukraine will continue to face risks of imported inflation through energy, equipment and logistics», Urakin noted.

China

China’s economy continued to show positive but uneven dynamics. In the first half of 2026, real GDP grew 4.7% year on year: 5.0% in Q1, slowing to 4.3% in Q2.

Industrial production growth slowed to 4.5% year on year in July from 5.3% in June. Over January–July, industrial output rose 5.3%.

High-tech manufacturing grew particularly fast, up 16.9% year on year in July. Production of computers, communications and other electronic equipment rose 19.1%.

These figures confirmed China’s strong position in global supply chains linked to digitalisation, electronics and artificial intelligence.

Domestic consumer demand, however, remained weak. Retail sales grew only 0.6% year on year in July and 1.2% in January–July. Car sales fell 17.0% in July, pointing to difficulties in parts of the consumer market.

According to China’s National Bureau of Statistics, consumer inflation was only 0.5% year on year in July, with prices down 0.1% over the month. Average CPI growth over seven months was 0.9%.

Producer prices, meanwhile, were 3.5% higher than a year earlier in July. The gap between consumer and producer inflation reflected the significant impact of energy and raw material costs on industry amid relatively weak domestic demand.

India

India remained one of the world’s most dynamic large economies. According to the Ministry of Statistics and Programme Implementation, real GDP grew 7.8% year on year in Q1 of fiscal year 2026/27, i.e. April–June 2026.

Domestic demand, investment and the development of infrastructure, industry and services remained the main growth drivers, with public infrastructure programmes and rising private consumption playing an important role.

Inflation in India accelerated to 4.45% year on year in July from 4.38% in June. Food inflation was 5.52%, putting additional pressure on household purchasing power.

Even so, India maintained much higher growth than most other large economies thanks to its large domestic market and favourable demographics.

Türkiye

Türkiye continued to operate amid extremely high inflation in July. According to TurkStat, consumer prices rose 1.78% month on month, while annual inflation was 31.75%, down from 32.11%.

The annual rate thus continued to decline but remained more than ten times higher than eurozone inflation. High financing costs, rising business costs and falling real purchasing power continued to weigh on domestic demand.

Subsequent Q2 data showed Türkiye’s real GDP grew 2.3% year on year and 1.1% quarter on quarter, indicating continued positive momentum, although high inflation continued to erode the quality of growth.

Brazil

Brazil showed more moderate growth. According to IBGE, real GDP grew about 0.5% quarter on quarter and 2.0% year on year in Q2 2026.

Growth in the first half of the year was about 1.9%, supported mainly by services, domestic consumption and some areas of industrial production.

Brazil’s IPCA consumer price index rose only 0.07% in July, down from 0.16% in June. Annual inflation slowed from 4.64% to 4.44%, and prices had risen 3.44% since the start of the year.

Slowing inflation created conditions for a gradual improvement in financial conditions, although high interest rates and limited budget resources remained constraints.

«The largest emerging economies are showing increasingly different growth models. China remains a powerful industrial and technological hub, but its domestic demand lags well behind production. India is growing at almost 8%, relying on its large domestic market and investment. Türkiye continues to fight inflation above 30%, while Brazil is gradually stabilising prices. For Ukraine, the experience of economies that achieve long-term growth through industry, technology and high value-added products is particularly important», Urakin believes.

Conclusions

As of the end of July 2026, Ukraine’s economy maintained relative macro-financial stability, but its structural imbalances continued to deepen.

Real GDP grew only 0.4% year on year and 0.3% quarter on quarter in Q2. The National Bank raised its 2026 growth forecast to 1.8%, but this remained insufficient for a rapid recovery of production potential.

Consumer inflation accelerated to 7.7% year on year in July from 7.2% in June. Core inflation remained at 8.1%, and the National Bank raised its key rate to 15.5%, while worsening its end-2026 inflation forecast to 10%.

International reserves stood at $51.2 billion on 1 August, virtually unchanged over the month. However, foreign exchange interventions remained large, and FX market stability continued to depend on timely international aid.

The goods deficit widened to about $34 billion in January–July, with imports of $58.1 billion and exports of $24.1 billion, confirming Ukraine’s significant dependence on imported goods, equipment and energy.

General fund revenues over seven months totalled UAH 2.06 trillion, while expenditures reached UAH 2.58 trillion. Security and defence received UAH 1.63 trillion, or 63.2% of general fund spending. International grant aid amounted to UAH 569.6 billion.

Public and publicly guaranteed debt reached UAH 9.57 trillion at the end of July. However, the predominance of long-term concessional financing and a decline in the weighted average cost of debt to 4.40% mitigated servicing risks.

Positive factors included rising average nominal wages, better agricultural results, the development of defence enterprises and continued external financing. Negative factors included high import dependence, structural labour shortages, weak industrial production and insufficient export growth.

The global economy also remained highly uncertain. The International Monetary Fund forecast global growth of 3.0% in 2026 and 3.4% in 2027.

The US grew about 0.4% quarter on quarter in Q2. The eurozone, according to revised data, grew 0.6%, and the UK 0.4%. July inflation was 3.4% in the US, 2.9% in the eurozone and 2.9% in the UK.

China’s economy grew 4.7% in the first half, but July industrial output slowed to 4.5% year on year and retail sales to 0.6%. India maintained high GDP growth of 7.8% in April–June, while Türkiye combined positive growth with 31.75% inflation. Brazil showed moderate growth as inflation slowed to 4.44%.

«July 2026 confirmed that the Ukrainian economy can maintain financial stability even with extremely high wartime spending, but this model remains dependent on external resources. Growing reserves, international grants and concessional loans make it possible to finance defence and social obligations, but they do not remove the main structural problems — the trade deficit, insufficient industrial production and labour shortages», Urakin noted.

According to the founder of Experts Club, the main task of economic policy in the coming years should be the transition from a model of wartime stabilisation to one of investment- and production-led growth.

«The next stage of economic policy should be not only about maintaining financial stability, but about turning imported equipment, international funds and defence spending into new productive assets. Long-term development should be based on energy autonomy, the defence industry, agri-processing, mechanical engineering, localisation of production, logistics, digital technologies and exports of high value-added products. Ukraine’s transition from a wartime stabilisation economy to a model of sustainable post-war growth will depend on its ability to carry out this transformation», Maksym Urakin concluded.

Source: Interfax-Ukraine