Key economic indicators of Ukraine and the world at the end of July and the start of August

The article presents the key macroeconomic indicators of 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, the BEA, the BLS, the US Federal Reserve, the European Central Bank, the ONS, the NBS, TurkStat, the IBGE and other official institutions. For the July and second-quarter indicators, statistical data published after the end of the reporting period were also used.

Maksym Urakin, Director for Development and Marketing at Interfax-Ukraine, Candidate of Economic Sciences, and founder of the Experts Club information and analytical centre, presented an overview of the main trends that shaped the state of the Ukrainian and global economy over the first seven months of 2026.

Macroeconomic indicators of Ukraine

As of the end of July 2026, the Ukrainian economy maintained relative macro-financial stability under full-scale war, but the pace of economic recovery remained low. After a contraction at the start of the year, real GDP returned to weak growth, but inflation risks intensified, which forced the National Bank to raise the key policy rate for the first time in several months. International reserves, after a sharp increase in June, remained close to $51.2 billion, while the goods trade deficit for January–July rose to roughly $34 billion.

The main features of the economic situation were high defence spending, the budget's dependence on international financing, a further increase in imports, a labour shortage and significant business spending on energy and logistics. At the same time, continued financial support from partners, the adaptability of business and the gradual recovery of agricultural production created preconditions for a revival of economic activity in the second half of the year.

According to a preliminary estimate by the State Statistics Service of Ukraine, real GDP in the second quarter of 2026 grew by 0.4% compared with the same quarter of 2025. Compared with the previous quarter, adjusted for seasonality, the economy grew by 0.3%. Nominal GDP amounted to UAH 2,305.7 billion. These data were published on 9 September, after the end of the reporting period.

Thus, after a 0.6% year-on-year contraction in the first quarter, the Ukrainian economy returned to positive dynamics. However, growth of less than half a percent effectively meant staying close to stagnation, and the recovery remained uneven across individual sectors.

On 30 July, the National Bank revised its forecast for Ukraine's real GDP growth in 2026 from 1.3% to 1.8%. The regulator expected that the easing of fiscal policy, the localisation of defence production and larger harvests would support economic activity in the second half of the year. For 2027–2028, growth was forecast to accelerate to roughly 2.8–3% annually.

At the same time, the NBU noted that the destruction of production capacity, energy facilities and logistics infrastructure continues to hold back domestic production. A shortage of skilled workers, security risks and insufficient investment activity in the private sector also remained important constraints.

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

Core inflation in July was 8.1% year on year, unchanged from June. In month-on-month terms, core prices rose by 0.3% versus 0.5% in the previous month. Thus, headline inflation accelerated, but underlying price pressure remained relatively stable, although it exceeded the overall consumer price index.

According to the National Bank, prices of raw food in July were 2.2% higher than a year earlier. Price growth for processed food slowed to 10%, while services inflation remained high at 13.7%. Prices for certain transport services and housing rents rose faster.

Administratively regulated prices rose by 11.8% year on year. Their dynamics were affected by increases in water supply, sewerage and public transport tariffs in a number of cities. At the same time, annual fuel price growth slowed to 28.0% from 33.4% in June, although in the second half of July petrol and diesel began to rise in price again owing to changes in world oil prices.

The main factors of inflationary pressure remained business spending on energy, wages and logistics. Additional influence came from infrastructure damage, a labour shortage and the need to finance backup sources of power supply.

The NBU also envisaged a possible further increase in the key policy rate to 16% in the fourth quarter of 2026. A return to a cycle of monetary easing was expected no earlier than the second quarter of 2027, provided inflationary pressure declines.

“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 becoming almost 14% more expensive, and fuel more than a quarter dearer over the year. Raising the key policy rate to 15.5% should contain second-round inflationary effects and support hryvnia savings, but a long-term decline in inflation is impossible without stabilising energy, logistics and production costs,” Urakin stressed.

The foreign exchange sector, after a significant increase in reserves in June, showed relative stability. According to preliminary NBU data, Ukraine's international reserves as of 1 August 2026 stood at $51.199 billion, having decreased over July by $70.4 million, or 0.1%.

Thus, after reserves rose by 12.1% in June, to $51.269 billion, their level in July was practically unchanged. At the same time, the structure of fund flows pointed to continued significant demand for foreign currency.

During July, the National Bank sold about $4.76 billion on the foreign exchange market. At the same time, about $1.64 billion was received in the government's foreign currency accounts at the NBU, including $683.3 million from the International Monetary Fund, $498.7 million through World Bank accounts and $458.6 million from the placement of foreign-currency domestic government bonds.

Reserve dynamics were also affected by the state's debt payments, the government's conversion of foreign currency received under external financing, and the revaluation of reserve assets. Net international reserves fell in July by roughly $669 million, or 1.8%, to $36.3 billion. The total volume of international reserves covered about 4.2 months of future imports.

In its July macroeconomic forecast, the NBU raised the expected volume of international reserves at the end of 2026 to $69.7 billion. For the end of 2027, $73.7 billion was forecast, and for the end of 2028 about $70 billion. Achieving these figures depended on the timely arrival of large-scale international financial support.

“Keeping international reserves close to $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 shortage of foreign currency remains significant. Ukraine has a sufficient stock of external liquidity for current stabilisation, but without an increase in exports of goods and services this resource cannot become the basis of long-term economic development,” Urakin believes.

Foreign trade remained one of the main sources of macroeconomic imbalances. According to the State Customs Service of Ukraine, trade turnover in January–July 2026 amounted to $82.2 billion. Imports of goods reached $58.1 billion, while exports were $24.1 billion. Thus, the goods trade deficit over seven months was about $34 billion. Compared with the results of the first half of the year, when the deficit was about $28.3 billion, it increased by $5.7 billion. Imports exceeded exports by roughly 2.41 times.

In July alone, imports rose by about $8.8 billion, and exports by only $3.1 billion. This dynamic indicated that the Ukrainian economy's high import dependence persisted during the war.

The largest supplier of goods to Ukraine remained China, from which products worth $16.8 billion were imported in January–July. China's share of total goods imports was about 28.9%. The next trading partners were Poland with $5.5 billion and Germany with $3.8 billion.

The main destinations of Ukrainian exports remained Poland, to which goods worth $2.8 billion were delivered, Türkiye with $2 billion and Germany with $1.5 billion.

In the import structure, the largest share was taken by machinery, equipment and vehicles, at $25.7 billion. Fuel and energy goods worth $8.5 billion were imported, and chemical industry products worth $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 complex, energy, transport and investment projects. At the same time, the import structure also showed insufficient development of domestic production of some industrial products and components.

The basis of Ukrainian goods exports was food products worth $14.1 billion, or about 58.5% of all exports. Metals and metal products worth $2.5 billion were exported, and machinery, equipment and transport worth $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 the rapid growth of import needs.

“A goods trade deficit of $34 billion 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 rebuilding infrastructure. At the same time, imports of equipment must be turned into new production capacity, higher productivity and export development. Without this, the trade gap will continue to be financed mainly by international aid,” Urakin emphasised.

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

Total revenues to the general and special funds of the state budget were about UAH 3.25 trillion. Cash expenditure of the state budget over seven months reached UAH 3.43 trillion, of which general fund expenditure was UAH 2.58 trillion.

In July alone, UAH 165.8 billion was received in the general fund, while cash expenditure from the general fund was UAH 345.9 billion.

International grant aid credited to the general fund of the state budget 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 of Ukraine's profit. Thus, international support and special revenues remained important components of budget resilience.

Security and defence remained the main area of budget spending. Over seven months, UAH 1.63 trillion, or 63.2% of total general fund expenditure, was directed to these needs. In July, the corresponding spending was UAH 222.5 billion.

UAH 993.5 billion, including contributions, was spent on pay for public-sector employees in January–July, UAH 424.9 billion on subsidies and current transfers to enterprises, and UAH 410.9 billion on social security. Spending on goods and services was UAH 319 billion.

Servicing the public debt cost UAH 200.7 billion, and transfers to local budgets UAH 162.4 billion.

Actual state borrowing to the general fund of the state budget over seven months was UAH 607.9 billion. UAH 299.4 billion was raised from domestic sources and UAH 308.5 billion from external ones. Public debt repayments over this period were UAH 335.5 billion.

From 1 July 2026, amendments to budget legislation entered into force under which revenues from the military levy are directed to a special fund of the state budget for the pay of servicemen of the Armed Forces of Ukraine. In July, UAH 17.9 billion of military levy was received in this fund.

As of 31 July, Ukraine's public and publicly guaranteed debt was UAH 9.572 trillion, or roughly $214.18 billion. Over the month it increased by UAH 81.3 billion.

The main part of the debt portfolio consisted of external liabilities. State external debt was UAH 7.3 trillion, domestic debt UAH 2.01 trillion, and state-guaranteed debt UAH 261.1 billion.

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

“Ukraine's budget model remains wartime in structure. More than 63% of general fund expenditure goes to security and defence, while civilian programmes largely depend on international financing. At the same time, the growth of public debt in itself is not the main risk if financing remains long-term and concessional. The key question is whether budget spending and external aid create conditions for increasing future economic potential,” Maksym Urakin said.

The labour market situation remained ambiguous. On the one hand, employers continued to report a shortage of skilled workers, especially in industry, construction, logistics and technical occupations. On the other hand, structural unemployment remained significant owing to regional disparities, forced migration and a mismatch of professional skills with employers' needs.

According to the State Statistics Service, the average nominal salary of a full-time employee in July 2026 was UAH 32,243. Compared with July 2025 it rose by 21.7%, but compared with June 2026 it fell by 1.6%.

Growth in nominal wages substantially exceeded annual consumer inflation. This pointed to an increase in real pay in the sector covered by statistics, although the overall situation with household incomes remained uneven.

In its July forecast, the National Bank expected the overall unemployment rate to fall to roughly 10% by the end of 2026 and to about 9% in 2027–2028. At the same time, real wages were forecast to rise by more than 12% in 2026.

In the agricultural sector, July was a period of noticeable improvement in production indicators. According to the State Statistics Service, the volume of agricultural production in January–July 2026 increased by 17.2% compared with the same period of the previous year.

This was a substantial change compared with the first half of the year, when agricultural output fell by 1.6%. The positive dynamics were ensured primarily by the arrival of the new harvest and stepped-up crop production. At the same time, shifts in harvest timing, weather conditions and a low comparison base had a significant effect on the sector's results. Therefore, the sharp acceleration of production in July should not automatically be interpreted as a long-term increase in the productivity of agriculture. Agriculture remained a key source of goods exports, foreign currency revenue and food security. However, in order to increase the economic effect, investment in the processing of agricultural raw materials, storage of products, transport infrastructure and logistics remained necessary.

Global economy

At the end of July 2026, the world economy remained relatively resilient, 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 a number of leading countries.

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

Compared with the April estimates, the forecast assumed somewhat weaker economic dynamics this year but a faster recovery next year. The IMF stressed that the global economy is under the influence of two opposing factors: a negative energy shock caused by the war and a positive technological impulse linked to the development of artificial intelligence.

Global disinflation, which had continued since 2024, has effectively stalled. The IMF raised its forecast for world inflation in 2026 to 4.7%. The main risks remained further escalation of military conflicts, intensifying trade disputes, worsening financial conditions and rising public debt.

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

The US economy continued to grow in the second quarter of 2026, although the pace of economic activity slowed. According to the Bureau of Economic Analysis preliminary estimate of 30 July, US real GDP rose by 1.5% at an annualised rate, compared with 2.1% in the first quarter. In ordinary quarterly terms, growth was about 0.4%.

The main positive contribution came from consumer spending, investment and exports. At the same time, government spending fell and imports rose, which had a negative effect on the overall result.

A feature of the economic situation remained the growth of private investment in technology areas, including data-processing centres, digital infrastructure and equipment for artificial intelligence.

In July, US consumer inflation slowed. According to the Bureau of Labor Statistics, the CPI rose by 3.4% year on year, compared with 3.5% in June.

In seasonally adjusted month-on-month terms, consumer prices rose by only 0.1% after a 0.4% decline in June. Core inflation, which excludes food and energy, was 2.5% y/y compared with 2.6% a month earlier.

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

On 29 July, the US Federal Reserve left the target range for the federal funds rate at 3.50–3.75%. The decision was supported by nine members of the Federal Open Market Committee, while three voted to raise the rate by 25 basis points.

The Fed noted that economic activity continues to grow at a solid pace and that the labour market situation remains relatively stable. At the same time, inflation still exceeded the 2% target, which limited room for easing monetary policy.

The European economy showed a moderate recovery in the second quarter. According to the Eurostat preliminary flash estimate of 30 July, real GDP of the eurozone rose by 0.4% compared with the previous quarter, and that of the European Union by 0.5%. Year on year, the corresponding figures were 1.0% and 1.2%.

Subsequent revisions, published in September, raised the estimate of quarterly growth to 0.6% in the eurozone and 0.7% in the European Union. Year-on-year economic growth was revised to 1.2% and 1.4%, respectively.

Thus, the European economy showed improving dynamics, but its growth remained moderate owing to the high cost of energy, trade risks and structural problems in industry.

According to the Eurostat preliminary estimate of 31 July, annual inflation in the eurozone rose to 2.9% from 2.8% in June. The final data confirmed this figure. For the European Union, inflation was 3.0%.

The main factor in the acceleration of inflation was more expensive energy. According to the preliminary estimate, energy prices rose by 10.0% year on year, compared with 8.5% in June. Services inflation accelerated to 3.3%, and that of non-energy industrial goods to 0.9%.

At the same time, price growth for food, alcohol and tobacco 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 was 2.25%, the main refinancing operations rate 2.40% and the marginal lending rate 2.65%.

The ECB stressed that further decisions would depend on inflation risks, the impact of the energy shock and economic dynamics. The regulator also noted that the full effect of the rise in energy prices had not yet shown up in the European economy.

In the United Kingdom, inflationary pressure also intensified in July. According to the Office for National Statistics, consumer inflation was 2.9% year on year, compared with 2.6% in June. Over the month, prices rose by 0.3%.

Core inflation remained at 2.6%, while services inflation slowed to 3.4%. The main contribution to the acceleration of the headline figure came from housing and utilities and certain non-food goods.

According to the ONS preliminary estimate, the UK's real GDP in the second quarter of 2026 rose by 0.4% compared with the previous quarter, after growth of 0.6% in the first quarter. The main contribution came from the services sector, which grew by 0.5%. Construction added 0.3%, while industrial production was unchanged.

On 30 July, the Bank of England left its base interest rate at 3.75%. Six members of the Monetary Policy Committee supported keeping the rate, while three voted to raise it to 4%.

“July showed that the largest central banks continue to act cautiously. The Federal Reserve and the European Central Bank kept interest rates unchanged, as did the Bank of England. At the same time, inflation in the US slowed to 3.4%, while in the eurozone and the United Kingdom it accelerated. Such divergent dynamics mean that the global cost of capital will remain relatively high, and Ukraine will continue to face the risks of imported inflation through energy, equipment and logistics,” Urakin noted.

The Chinese economy continued to show positive but uneven dynamics. In the first half of 2026, China's real GDP rose by 4.7% year on year. In the first quarter growth was 5.0%, and in the second quarter it slowed to 4.3%.

In July, industrial production growth slowed to 4.5% y/y from 5.3% in June. Over January–July, industrial production rose by 5.3%.

Particularly high rates were shown by high-tech manufacturing, whose output in July rose by 16.9% year on year. Production of computer, communication and other electronic equipment rose by 19.1%.

Such indicators confirmed that China retained strong positions in global production chains linked to digitalisation, electronics and artificial intelligence.

At the same time, domestic consumer demand remained weak. Retail sales in July rose by only 0.6% y/y, and by 1.2% over January–July. Car sales fell by 17.0% in July, which pointed to a difficult situation in part of the consumer market.

According to China's National Bureau of Statistics, consumer inflation in July was only 0.5% year on year, and prices fell by 0.1% over the month. Over seven months, average CPI growth was 0.9%.

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

India continued to be one of the most dynamic large economies in the world. According to an estimate by India's Ministry of Statistics and Programme Implementation, real GDP in the first quarter of the 2026/27 fiscal year, that is, in April–June 2026, rose by 7.8% year on year.

The main drivers of economic growth remained domestic demand, investment, and the development of infrastructure, industry and the services sector. State infrastructure programmes and growth in private consumption played an important role.

At the same time, inflation in India in July accelerated to 4.45% year on year from 4.38% in June. Food inflation was 5.52%, which put additional pressure on the population's purchasing power.

Despite this, India maintained significantly higher economic growth rates than most other large economies, thanks to its huge domestic market and favourable demographic structure.

Türkiye continued to operate in July in conditions of extremely high inflation. According to TurkStat, consumer prices rose by 1.78% compared with June, while annual inflation was 31.75%, compared with 32.11% the previous month.

Thus, the annual figure continued to fall, but remained more than ten times higher than inflation in the eurozone. The high cost of financing, rising business costs and a decline in the population's real purchasing power continued to hold back domestic demand.

Subsequent data for the second quarter showed that Türkiye's real GDP rose by 2.3% year on year and by 1.1% compared with the previous quarter. This pointed to continued positive economic dynamics, although high inflation continued to worsen the quality of growth.

Brazil showed more moderate economic dynamics. According to IBGE, real GDP in the second quarter of 2026 rose by about 0.5% compared with the previous quarter and by 2.0% year on year.

In the first half of the year, economic growth was about 1.9%. The main factors supporting economic activity remained the services sector, domestic consumption and certain areas of industrial production.

In July, Brazil's IPCA consumer price index rose by only 0.07%, compared with 0.16% in June. Annual inflation slowed from 4.64% to 4.44%, and since the start of the year consumer prices have risen by 3.44%.

The slowdown in inflation created conditions for a gradual improvement in financial conditions, although high interest rates and limited budget resources remained restraining factors.

“The largest emerging economies are showing increasingly different growth models. China remains a powerful industrial and technology hub, but its domestic demand lags noticeably behind production. India is growing by almost 8%, relying on a vast domestic market and investment. Türkiye continues to fight inflation above 30%, while Brazil is gradually stabilising price dynamics. For Ukraine, the experience of economies that deliver long-term growth through the development of industry, technology and high value-added products is particularly important,” Urakin believes.

Conclusions

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

Real GDP in the second quarter rose by only 0.4% year on year and by 0.3% compared with the previous quarter. The National Bank raised its forecast of economic growth for 2026 to 1.8%, but this figure remained insufficient for a rapid recovery of production potential.

Consumer inflation in July accelerated to 7.7% y/y after 7.2% in June. Core inflation remained at 8.1%, and the National Bank raised the key policy rate to 15.5%. At the same time, the inflation forecast for the end of 2026 was worsened to 10%.

International reserves on 1 August were $51.2 billion, practically unchanged over the month. At the same time, the scale of foreign exchange interventions remained significant, and the stability of the foreign exchange market continued to depend on the timely arrival of international aid.

The goods deficit for January–July increased to roughly $34 billion, with imports of $58.1 billion and exports of $24.1 billion. This confirmed Ukraine's continued significant dependence on imported goods, equipment and energy.

Revenues to the general fund of the state budget over seven months were UAH 2.06 trillion, while expenditure reached UAH 2.58 trillion. UAH 1.63 trillion, or 63.2% of general fund expenditure, was directed to security and defence. International grant aid was UAH 569.6 billion.

State and state-guaranteed debt at the end of July reached UAH 9.57 trillion. At the same time, the predominance of long-term concessional financing and the decline in the weighted average cost of debt to 4.40% softened the risks of servicing it.

Positive factors remained growth in the average nominal salary, improved results in agricultural production, the development of defence enterprises and the preservation of external financing. Negative ones were high import dependence, a structural labour shortage, weak industrial production and insufficient export growth.

The world economy also remained in conditions of heightened uncertainty. The International Monetary Fund forecast global growth of 3.0% in 2026 and 3.4% in 2027.

The US grew by about 0.4% in ordinary quarterly terms in the second quarter. The eurozone, according to revised data, increased GDP by 0.6%, and the United Kingdom by 0.4%. At the same time, July inflation was 3.4% in the US, 2.9% in the eurozone and 2.9% in the United Kingdom.

The Chinese economy grew by 4.7% in the first half, but July industrial production slowed to 4.5% y/y, and retail sales to 0.6%. India maintained high GDP growth of 7.8% in April–June, while Türkiye combined positive economic dynamics with inflation of 31.75%. Brazil showed moderate growth against the backdrop of inflation slowing to 4.44%.

“July 2026 confirmed that the Ukrainian economy is able to maintain financial stability even under 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 eliminate the main structural problems: the trade balance deficit, insufficient industrial production and a shortage of labour,” Urakin noted.

In the view of the founder of Experts Club, the main task of economic policy in the coming years must become the transition from a model of wartime stabilisation to a model of investment and production growth.

“The next stage of economic policy should consist not only in maintaining financial stability, but in turning imported equipment, international funds and defence spending into new production assets. The basis of long-term development should be energy autonomy, the defence-industrial complex, agro-processing, mechanical engineering, localisation of production, logistics, digital technologies and exports of high value-added products. It is the ability to carry out such a transformation that will determine Ukraine's transition from a wartime stabilisation economy to a model of sustainable post-war growth,” Maksym Urakin concluded.

The monthly analytical and statistical product “Economic Monitoring” is available to Interfax-Ukraine clients.

Head of the “Economic Monitoring” project, Candidate of Economic Sciences Maksym Urakin

Source: Interfax-Ukraine, https://interfax.com.ua/news/projects/1232389.html