This article presents key macroeconomic indicators for Ukraine and the global economy as of late June 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 Bureau of Economic Analysis (BEA), the Bureau of Labor Statistics (BLS), the U.S. Federal Reserve System, the European Central Bank, the Office for National Statistics (ONS), the National Bureau of Statistics (NBS), TurkStat, the Brazilian Institute of Geography and Statistics (IBGE), and other official institutions. For indicators covering June and the second quarter, monthly and quarterly statistical data published after the end of the reporting period were used.
Maksym Urakin, Ph.D. in Economics and founder of the Experts Club information and analytical center, presented an overview of the key trends that shaped the state of the Ukrainian and global economies in the first half of 2026.
Ukraine’s Macroeconomic Indicators
As of the end of June, the Ukrainian economy maintained macrofinancial stability and, following a contraction at the beginning of the year, returned to modest growth. Overall consumer inflation slowed noticeably, but underlying price pressures continued to intensify. After four months of decline, international reserves rose sharply thanks to large-scale external financing, while the trade deficit for the first half of the year widened to $28.3 billion. The budget continued to operate under conditions of an extremely high defense burden and significant dependence on international financial support.
According to a preliminary estimate by the State Statistics Service, released after the end of the reporting period, Ukraine’s real GDP in the second quarter of 2026 increased by 0.4% compared to the second quarter of 2025. On a seasonally adjusted basis, growth compared to the previous quarter was 0.3%. Nominal GDP amounted to 2,305.7 billion UAH. Thus, following a 0.6% year-over-year decline in real GDP in the first quarter, the economy returned to positive—albeit very weak—growth.
In its April macroeconomic forecast, the National Bank projected Ukraine’s real GDP growth in 2026 to be only 1.3%. The regulator attributed the slow pace of recovery to the results of the first quarter, damage to the power grid, and the accumulation of negative economic consequences from external geopolitical shocks. At the same time, for 2027–2028, the NBU expected growth to accelerate to 2.8–3.7%, provided that economic conditions gradually normalized and the energy sector and investment activity recovered.
“The second-quarter results showed that the Ukrainian economy managed to emerge from the technical recession at the start of the year; however, year-over-year growth of 0.4% effectively means the economy remains near stagnation. Following a 0.6% decline in the first quarter, this trend is a positive sign, but it does not yet indicate the start of a sustained recovery. Given the NBU’s forecast of 1.3% for all of 2026, the margin for safety remains minimal, and risks related to energy, security, and foreign trade could easily alter the economy’s trajectory,” Urakin noted.
The inflation situation in June also remained mixed. According to data from the State Statistics Service and the NBU, consumer inflation slowed to 7.2% year-over-year, down from 8.2% in May. Compared to the previous month, consumer prices fell by 0.1%, while they rose by approximately 5.7% over the first half of the year. At the same time, core inflation accelerated from 7.9% to 8.1% year-over-year and stood at 0.5% month-over-month. The NBU noted that the overall figure was in line with its April forecast, while core inflation exceeded the projected trajectory.
The slowdown in overall inflation was largely due to an increase in the supply of raw food products. Their prices had already begun to decline slightly on a year-over-year basis. At the same time, processed food products remained approximately 10.4% more expensive than a year earlier, while inflation for services accelerated to 13.7% and for administratively regulated prices to approximately 10.7%. The rise in fuel prices slowed but remained extremely high—about 33.4% year-over-year. The NBU cited rising producer costs, high electricity and logistics costs, and rapid wage growth as the main drivers of underlying price pressures.
The NBU’s April forecast projected that inflation would accelerate to 9.4% by the end of 2026 due to pressure from production costs, primarily energy costs. After that, the regulator expected the disinflationary trend to resume and inflation to gradually return to the 5% target in 2028.
On June 18, the National Bank’s Board kept the policy rate at 15% per annum. The regulator noted that this level of monetary tightening remains sufficient to sustain demand for hryvnia-denominated savings and curb pressure on the foreign exchange market. At the same time, the NBU emphasized its readiness to raise the rate should fundamental inflationary pressures intensify further.
“The decline in headline inflation from 8.2% to 7.2% is a positive development, but the structure of inflation remains complex. Core inflation has risen to 8.1%, services have become nearly 14% more expensive, and fuel prices have risen by more than a third over the past year. This means that a significant portion of inflation is now driven not by seasonal goods, but by business costs, wages, energy, and logistics. Under these conditions, keeping the rate at 15% in June was a logical decision to support hryvnia savings and currency stability,” Urakin emphasized.
The foreign exchange sector saw a significant strengthening in June. As of July 1, 2026, Ukraine’s international reserves stood at $51.269 billion, an increase of 12.1% over the month. This brought to an end a four-month period of consecutive reserve declines.
In June, approximately $11.32 billion was deposited into the government’s foreign currency accounts at the National Bank, of which $6.82 billion came from the European Union and approximately $4.49 billion was funding channeled through World Bank accounts. At the same time, the NBU sold $5.15 billion on the interbank foreign exchange market. $269.7 million was allocated to service and repay foreign-currency government debt, and Ukraine paid an additional $171.5 million to the IMF. The revaluation of financial instruments and other factors reduced reserves by $191.4 million. The current level of reserves was sufficient to finance approximately 5.2 months of future imports.
“The surge in reserves from $45.7 billion to over $51 billion has fundamentally improved the short-term outlook after four months of decline. But it is important to understand the source of this growth: it is primarily driven by large-scale inflows of international aid. The National Bank’s sale of over $5 billion in foreign currency in just one month shows that the domestic foreign exchange market remains structurally in deficit. “Therefore, long-term stability requires not only external financing but also growth in exports and a reduction in critical import dependence,” Urakin believes.
According to the State Customs Service, Ukraine’s trade turnover in January–June 2026 amounted to $70.3 billion. Imports reached $49.3 billion, while exports totaled $21 billion. Thus, the trade deficit for the first half of the year was approximately $28.3 billion, and imports exceeded exports by about 2.35 times.
Ukraine imported the most goods from China—$13.9 billion—followed by Poland—$4.7 billion—and Germany—$3.2 billion. The main destinations for Ukrainian exports were Poland—$2.4 billion—Turkey—$1.8 billion—and Italy—$1.3 billion.
In the import structure, machinery, equipment, and transportation accounted for $21.3 billion; fuel and energy products—$7.4 billion; and chemical industry products—$6.9 billion. Together, these three categories accounted for 72% of total merchandise imports. Exports were dominated by food products at $12.5 billion, metals and metal products at $2.2 billion, and machinery, equipment, and transportation at $1.8 billion.
“A merchandise trade deficit of $28.3 billion in just half a year is already a systemic macroeconomic imbalance. Some of these imports are necessary for Ukraine’s defense, energy sector, and reconstruction, and record purchases of machinery and equipment could potentially create new production capacity. But for this to happen, imports of capital goods must be transformed into domestic production and future exports. If this does not happen, the trade gap will continue to be offset primarily by international aid and foreign exchange reserves,” Urakin emphasized.
The budget situation at the end of the first half of the year remained tense but manageable. In January–June, the general fund of the state budget received approximately 1.898 trillion UAH. International grant aid amounted to 569.6 billion UAH. In total, the general and special funds of the state budget received 2.52 trillion UAH, while cash expenditures of the state budget reached 2.83 trillion UAH.
Cash expenditures from the general fund for the first half of the year totaled 2.23 trillion UAH, which is 18.9% more than during the same period last year. In June alone, 431.5 billion UAH was spent. Over the six-month period, approximately 1.4 trillion UAH—or 63% of all General Fund expenditures—was allocated to security and defense; in June, these expenditures totaled 263.5 billion UAH.
UAH 851 billion was allocated for the wages and benefits of public sector employees for January–June; UAH 384.9 billion went toward subsidies and current transfers to enterprises; UAH 352.1 billion was spent on social security; and UAH 262.4 billion was spent on goods and services. Servicing the national debt cost 184.5 billion hryvnia, while transfers to local budgets totaled 142.7 billion hryvnia.
Actual government borrowing to the General Fund over the six-month period totaled 486.1 billion UAH. Of this amount, 288.9 billion UAH was allocated to repay government debt, and 184.5 billion UAH to service it. At the same time, the scale of grant funding demonstrated that international support continues to play a critically important role in financing the state’s civilian functions.
“In the first half of the year, the budget definitively cemented its military focus: approximately 63% of General Fund expenditures were directed toward security and defense. At the same time, nearly 570 billion UAH in grants demonstrate the extent to which the implementation of civilian budget programs depends on support from partners. Under these conditions, the main task of public finances is to maintain defense capabilities without compromising macrofinancial stability, while simultaneously seeking resources for the energy sector, infrastructure, and the restoration of productive capacity,” Urakin noted.
The Global Economy
As of the end of June 2026, the global economy remained relatively stable, but the geopolitical, energy, and inflationary landscape was marked by high volatility. Following a sharp rise in energy prices in the spring, inflation in a number of leading economies began to decline in June, though the major central banks remained cautious. The U.S. Federal Reserve and the Bank of England left interest rates unchanged, while the European Central Bank, on the other hand, raised its key rates in June.
In its April World Economic Outlook, the International Monetary Fund projected global economic growth of 3.1% in 2026 and 3.2% in 2027, assuming the war in the Middle East would be limited in duration and scope. The IMF expected a slight acceleration in global inflation in 2026, followed by a resumption of its decline in 2027. Among the main downside risks, the Fund cited a longer or broader conflict, increased geopolitical fragmentation, new trade disputes, and a deterioration in financial market conditions.
The U.S. economy continued to grow in the second quarter, although the pace slowed. According to the BEA’s second estimate, real GDP increased by 1.5% on an annualized basis, compared with 2.1% in the first quarter. On a seasonally adjusted quarterly basis, growth was approximately 0.4%. Consumer spending, exports, and investment contributed positively, while government spending declined and imports rose.
After a sharp acceleration in the spring, U.S. inflation eased somewhat in June. The Consumer Price Index rose 3.5% year-over-year, compared with 4.2% in May. On a seasonally adjusted monthly basis, the CPI fell by approximately 0.4%. Core inflation stood at 2.6% year-over-year. Energy prices remained 15.7% higher than a year earlier, and gasoline prices were up by approximately 26.7%, although in June the energy index fell by 5.7% and gasoline prices dropped by 9.7% on a monthly basis.
On June 17, the Federal Reserve unanimously kept the target range for the federal funds rate at 3.5–3.75%. The Fed noted that economic activity continues to expand at a steady pace, but inflation remains above the 2% target, particularly due to supply shocks and energy prices.
The eurozone showed a marked improvement in economic momentum in the second quarter. According to Eurostat’s revised estimate, real GDP grew by 0.6% compared with the previous quarter and by 1.2% year-over-year. For the European Union, the corresponding figures were 0.7% and 1.4%.
Annual inflation in the eurozone slowed to 2.8% in June from 3.2% in May, while in the European Union it slowed to 2.9% from 3.3%. Energy prices remained 8.5% higher than a year earlier, services 3.2% higher, food, alcohol, and tobacco 1.5% higher, and non-energy industrial goods 0.7% higher. Core inflation, excluding energy, food, alcohol, and tobacco, stood at 2.4%.
On June 11, the European Central Bank raised all three key interest rates by 25 basis points, citing heightened medium-term inflation risks amid the war in the Middle East. As of June 17, the deposit rate stood at 2.25%, the main refinancing rate at 2.40%, and the marginal lending rate at 2.65%. The Eurosystem’s new baseline forecast projected average inflation of 3.0% in 2026, 2.3% in 2027, and 2.0% in 2028.
In the United Kingdom, annual inflation fell to 2.6% in June from 2.8% in May. Prices rose by only 0.1% over the month. Core inflation remained at 2.6%, while services inflation slowed from 3.7% to 3.6%.
The Bank of England left its base rate at 3.75% in June. Seven members of the Monetary Policy Committee voted to keep the rate unchanged, while two favored raising it to 4%. The Bank of England noted that global energy prices had fallen since the previous meeting but remained above pre-crisis levels and were characterized by significant volatility.
According to ONS estimates, the UK’s real GDP grew by 0.4% in the second quarter compared with the previous quarter, following a 0.6% increase in the first quarter. On a year-over-year basis, the economy grew by 1.2%. The services sector made the largest contribution, growing by 0.5%, while construction added 0.3%; industrial production remained unchanged.
“June showed that global monetary policy has stopped moving in a single direction. The Federal Reserve and the Bank of England kept rates steady, while the ECB was forced to raise them by 25 basis points. At the same time, inflation in the U.S. fell from 4.2% to 3.5%, in the eurozone from 3.2% to 2.8%, and in the United Kingdom from 2.8% to 2.6%. This provides some relief, but the energy component remains highly volatile. For Ukraine, this means that the risks of imported inflation and the relatively high cost of global capital persist,” Urakin noted.
The Chinese economy grew by 4.7% year-over-year in the first half of 2026, with GDP reaching 69.5704 trillion yuan. Growth stood at 5.0% in the first quarter and 4.3% in the second quarter, indicating a certain slowdown in economic momentum. The services sector grew by 5.2% over the first half of the year, while the secondary industrial sector grew by 3.9%.
In June, China’s CPI rose by 1.0% year-over-year but fell by 0.3% month-over-month. Average inflation for January–June also stood at 1.0%. Industrial production increased by 5.3% year-over-year in June and by 5.4% in the first half of the year. High-tech manufacturing grew by 14.1% and 13.3%, respectively.
At the same time, domestic demand remained significantly weaker than industrial production. Retail sales in June rose by only 1.0% year-over-year, and by 1.3% in the first half of the year. Fixed capital investment, excluding rural households, fell by 5.7% over the six-month period. In contrast, China’s foreign trade in goods increased by 16.9% over the first half of the year, with exports rising by 13.4% and imports by 22.1%.
India maintained the highest growth rates among the world’s largest economies. According to the official estimate by the Ministry of Statistics and Population (MoSPI), real GDP in the first quarter of the 2026–27 fiscal year—that is, April–June 2026—increased by 7.8% year-over-year. Nominal GDP grew by 10.3%, and real gross value added by 8.2%. Real GDP for the quarter was estimated at 81.36 trillion rupees, while nominal GDP was estimated at 88.27 trillion rupees.
Turkey continued to operate under conditions of extremely high inflation in June. According to TurkStat, consumer prices rose by approximately 1% over the month, while the annual rate remained near 32%. Cumulative price growth for the first half of the year approached 18%. Further official data for the second quarter showed that Turkey’s GDP grew by 2.3% year-over-year and by 1.1% compared to the previous quarter. Thus, the economy continued to grow, but tight financial conditions and high inflation held back domestic demand.
Brazil showed more moderate and balanced growth. In the second quarter of 2026, GDP increased by 0.5% compared to the previous quarter and by 2.0% year-over-year. In the first half of the year, the economy grew by 1.9% year-over-year. In June, the IPCA index rose by only 0.16% month-over-month, compared to 0.58% in May, while annual inflation slowed to 4.64%. Since the beginning of the year, prices have risen by 3.36%.
“Key emerging economies ended the first half of the year with very different growth patterns. China grew by 4.7%, but its second quarter was weaker than the first, and domestic consumption lags significantly behind industry and exports. India continues to grow by nearly 8%, driven by the size of its domestic market and investment. Turkey remains an example of how inflation exceeding 30% limits the quality of economic growth, while Brazil is showing more moderate growth with inflation gradually coming under control. For Ukraine, the main conclusion remains the same: long-term growth requires its own industrial, technological, and export base,” Urakin believes.
Conclusions
As of the end of June 2026, Ukraine maintained macrofinancial stability and showed the first signs of emerging from the recession that began earlier in the year. Real GDP in the second quarter grew by 0.4% year-over-year and by 0.3% quarter-over-quarter, following a 0.6% year-over-year decline in the first quarter. At the same time, the NBU’s forecast projected economic growth of only 1.3% for the full year.
Consumer inflation slowed to 7.2% in June, but core inflation accelerated to 8.1%. The discount rate remained at 15%. After four months of decline, international reserves increased by 12.1% to $51.27 billion; however, the NBU’s currency interventions remained significant.
The trade deficit for January–June reached approximately $28.3 billion, with imports totaling $49.3 billion and exports totaling $21 billion. Revenues of the general fund of the state budget amounted to nearly 1.9 trillion UAH, while its expenditures totaled 2.23 trillion UAH. Approximately 1.4 trillion UAH, or 63% of all general fund expenditures, was allocated to security and defense. International grants totaled 569.6 billion UAH.
“Positive factors in the first half of the year included the resumption of at least minimal GDP growth, the return of international reserves to above $50 billion, stability in the foreign exchange market, more regular international financing, and the adaptability of Ukrainian businesses. The main risks remain the war, the state of the energy sector, high production costs, a labor shortage, weak commodity exports, and a growing trade imbalance. Ukraine has a significant reserve of external liquidity, but it cannot replace domestic economic growth,” emphasized the founder of Experts Club.
The global economy also remained in a state of heightened uncertainty. The IMF projected global growth of 3.1% in 2026. In the second quarter, the U.S. grew by approximately 0.4% on a quarterly basis, the eurozone by 0.6%, and the United Kingdom by 0.4%. Inflation slowed to 3.5% in the U.S., 2.8% in the eurozone, and 2.6% in the UK in June; however, central banks maintained a cautious approach, and the ECB even raised rates in June.
China’s economy grew by 4.7% in the first half of the year, and India’s by 7.8% in April–June, while Turkey combined GDP growth of 2.3% in the second quarter with inflation exceeding 30%. Brazil’s GDP rose by 2.0% year-over-year in the second quarter, with annual inflation at 4.64% in June.
“The first half of 2026 showed that Ukraine’s stabilization model continues to work, but its vulnerability remains extremely high. The return of GDP to modest growth and the replenishment of reserves are positive signs; however, a $28.3 billion goods trade deficit, high underlying inflationary pressures, and the budget’s dependence on external financing reveal the limitations of this model. The next phase of economic policy should focus not only on maintaining financial stability but also on transforming imported equipment, international funds, and defense spending into new productive assets. The foundation for long-term development should be energy self-sufficiency, the defense-industrial complex, agricultural processing, machine building, production localization, logistics, digital technologies, and the export of high-value-added products. “Only under these conditions will Ukraine be able to transition from an economy of wartime stabilization to a model of sustainable postwar growth,” concluded Maksym Urakin.
The monthly analytical and statistical publication “Economic Monitoring” is available to Interfax-Ukraine clients.
Maksym Urakin, Ph.D. in Economics, Project Manager of “Economic Monitoring”
