Ukraine currently records a monthly trade deficit of over $3 billion—exceeding the annual exports of countries like Moldova or Armenia. In June 2024, this figure hit a record $5 billion for a single month.
In the first half of 2024, Ukraine imported goods worth $53 billion and exported just $26 billion. As a result, the deficit widened from $18 billion to $27 billion year-on-year, a 50% increase. The National Bank forecasts a $52 billion deficit for 2024, which equals a quarter of the country’s GDP.
Ukraine’s imports are dominated by machinery, equipment, chemicals, and fuel. Most exports are food products and metals. Rising imports are driven by demand for energy infrastructure repairs as Russian attacks persist. Import of fuel continues to grow due to destruction at refineries and storage facilities.
Exports remain sluggish amid international political tensions, trade wars, and the removal of EU preferences, with new tariffs and quotas now in effect. Ukrainian industry faces shortages in components, energy challenges, and labor scarcity.
On the positive side, the US maintains low tariffs on Ukrainian goods. Chinese electric vehicles, however, are massively imported without restriction. Ukraine does not implement protective measures and remains reliant on external financial support.
The Ukrainian central bank’s reserves stand at about $40 billion, sustained by international aid. If support wanes, the reserves will quickly decline, risking an economic crisis. Solutions include expanding exports in promising sectors—IT, food processing, light industry—or boosting arms exports. Currency devaluation could also spur exports but carries inflation and income risks.
The national defense sector could increase exports but is currently running at a third of its manufacturing capacity. Devaluation is a potential option but threatens higher prices and lower real incomes for the population.
Ukraine’s trade deficit is a structural issue caused by the war and barriers in external markets. The deficit will remain high, forcing the country to balance financial stability, export growth, and continued external support.
