Olga Zykova speaks at Hudson Institute’s Central and Eastern Europe Strategy Summit about Ukraine’s economic resilience during wartime

In Washington, D.C., Deputy Minister of Finance of Ukraine Olga Zykova participated in the Hudson Institute’s Central and Eastern Europe Strategy Summit. She joined the panel discussion “Ukraine as a Source of Economic and Security Dynamism”.

Olga Zykova outlined the current macroeconomic and financial situation in Ukraine, how the Ukrainian Government has managed to maintain financial stability during the ongoing war, the progress of reforms, and the crucial role of international support.

“In February 2022, the Government of Ukraine faced unprecedented challenges. Seaports were blocked, millions of people displaced, heavy industry destroyed, and 90% of businesses suspended operations. The figures from 2022 speak louder than words: GDP plummeted to -28.8%, inflation surged to 26.6%, the budget deficit rose to 17.5% of GDP, exports dropped by 35%, and defense spending jumped to 30% of GDP. All this had a massive impact on the financial system. Nevertheless, decisive Government actions to preserve macroeconomic and financial stability proved effective,” said the Deputy Finance Minister.

To maintain financial stability, the Ministry of Finance introduced key measures: budget expenditures optimization, issuance of Wartime Bonds, and an effective public debt management strategy.

From the first days of the full-scale war, the Government ensured all social payments, humanitarian expenditures, and public sector wages were made on time and in full. At that time, the monthly State Budget deficit reached about USD 5 billion.

“Crucially, in 2023 we avoided monetary financing. This helped bring inflation down to 5.1%. The monthly budget gap dropped to USD 3.5 billion, and tax and customs revenues returned to pre-war levels,” Olga Zykova noted.

Despite the war’s devastating economic consequences, Ukraine remains resilient and has made significant progress in preserving macro-financial stability and supporting economic activity. The Government shifted from biweekly planning to full-fledged medium-term budgeting. The Ministry of Finance started issuing Wartime Bonds, which have raised over USD 42 billion for the State Budget since February 2022.

In 2024, Ukraine’s GDP grew by around 3.6%, and State Budget revenues increased by USD 9.4 billion compared to 2023. External financing totaling USD 41.7 billion helped cover all priority social expenditures.

“In 2025, we have three main priorities: preserving macroeconomic stability, advancing structural reforms, and implementing critical recovery measures. GDP growth is projected at 2.7%, and year-end inflation at 9.5%. Ukraine’s 2025 budget is balanced and aligned with urgent needs,” Deputy Finance Minister added.

She emphasized that 26% of GDP in 2025 is allocated to security and defense. The Government plans to reduce the budget deficit to 19.4% of GDP in 2025, down from 24% in 2024. The external financing need for 2025 is estimated at USD 39.3 billion.

Despite ongoing war-related challenges, the Ukrainian Government remains committed to reforms that not only bring Ukraine closer to the EU but also support its economic development and post-war recovery.

In 2024, in partnership with the World Bank, Ukraine developed an analytical tool called the Reforms Matrix – a roadmap and transformation plan for the country. It includes over 300 reforms with 533 measurable indicators (262 already completed, 271 in progress). In 2025, 75 reform steps and conditions are planned — covering economic de-shadowing, public finance and investment management, rule of law, anti-corruption measures, public administration, and state asset management. It also includes reforms in healthcare, education, labor markets, and programs to support the return of migrants.

“But no country can endure alone in times of such uncertainty and turbulence. Cooperation with international donors is key – especially to cover social and humanitarian spendings. Timely access to financial resources is critical to ensure stable public finance operations. Since February 2022, Ukraine has received USD 132 billion in direct budget support. The EU has become the largest donor, providing USD 50.5 billion in direct budget assistance,” Olga Zykova said.

The Ministry of Finance representative also highlighted Ukraine’s close cooperation with the International Monetary Fund. In 2023, Ukraine and the IMF launched an unprecedented cooperation program for a country at war – a four-year Extended Fund Facility (EFF) program worth USD 15.5 billion, of which USD 10.1 billion has already been disbursed following seven successful reviews.