Olga Zykova: Ukraine’s recovery continues – even in wartime, we are laying the foundation for a new economic growth model

Deputy Minister of Finance of Ukraine Olga Zykova presented the Government’s vision regarding the current stage of recovery, key financial challenges, the role of international partners, and Ukraine’s long-term economic transformation.

Olga Zykova spoke during the panel discussion “Special Focus: Rebuilding Ukraine” at the Central & Eastern European Forum 2025 in Vienna. 

According to her, nearly four years of the full-scale war launched by russia in February 2022 have caused significant damage to Ukraine’s infrastructure, economy, and society. According to the latest Rapid Damage and Needs Assessment (RDNA4), conducted by the Government of Ukraine jointly with the World Bank, the United Nations, and the European Union, total damages amount to USD 176 billion, while recovery needs are estimated at USD 524 billion over the next ten years. An updated RDNA5 assessment will be published in February 2026 and will reflect the situation as of the end of 2025.

Olga Zykova emphasized that Ukraine’s financial resilience since the beginning of the full-scale invasion has been ensured by a broad coalition of international partners. Total budget support since 2022 has already exceeded USD 167.6 billion, including USD 52.4 billion provided by partners in 2025 alone.

“The IMF program, the World Bank’s Development Policy Financing, the EU’s Ukraine Facility, G7 countries, and other international partners have provided critically important budget financing, conditional on the implementation of structural reforms, and used by the Government of Ukraine to deliver those reforms. At the same time, the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and other development partners have ensured an inflow of investment into the private sector even during the war and supported preparation for post-war reconstruction, helping companies survive, expand their operations, and preserve jobs,” Olga Zykova noted.

She also highlighted the evolution of cooperation with international financial institutions, which have demonstrated flexibility and the ability to adapt support instruments to wartime conditions.

According to Olga Zykova, the Government of Ukraine has a structured vision for reconstruction — from supporting the state’s core functions and laying the foundation for key structural reforms, including within IMF and EU programs, to modernizing the economy with a focus on private investment as a key driver of long-term growth.

Regarding the 2026 budget priorities, the Deputy Minister of Finance stressed that the country continues to operate under a harsh wartime fiscal reality: over 60% of the budget is allocated to security and defense. At the same time, despite ongoing security threats, the Government maintains a clear focus on recovery. Key funding priorities include the housing sector (nearly USD 1.1 billion in the 2026 state budget), economic support (around USD 1.2 billion), infrastructure projects (USD 950 million), as well as energy and energy efficiency (USD 310 million).

A major challenge remains aligning donor funding with the actual needs of the budget. According to Olga Zykova, the issue lies not only in the volume of resources but also in three key imbalances: timing (not always predictable or timely inflows), instruments (the need to mobilize financing without exceeding a safe debt threshold and while preserving debt sustainability), and institutional capacity (a mismatch between donor requirements and the implementation capacity of institutions and communities).

“Our task is not just to mobilize funds, but to ensure they arrive on time, in the right form, and contribute to economic transformation rather than merely restoring what has been destroyed,” she emphasized.

Currently, the Government of Ukraine is shaping a new economic model for recovery based on the rule of law, transparency, effective corporate governance, and the private sector as the main engine of growth.

“Ukraine’s recovery is a process that will span decades. Its uniqueness lies in the fact that reconstruction is already underway during the war, meaning that once it ends, the country will not start from scratch but will have a solid foundation built on implemented reforms and achieved financial resilience,” Olga Zykova stressed.