(Bloomberg) — Ukraine’s economy grew 5.3% last year as it reasserted control of a Black Sea export corridor and harvested a bumper crop despite continued Russian missile and drone attacks.
Most Read from Bloomberg
The economy expanded 4.7% in October through December, for a third straight quarter of growth, according to preliminary data from the State Statistics Service on Thursday. The economy shrank almost 30% in 2022 after Russian President Vladimir Putin ordered the invasion.
While Russian attacks have damaged the power grid, ports, railroads and energy facilities, Ukraine has seen a measure of growth return as agricultural exports resume and domestic businesses adapt to new demands.
“The Ukrainian economy continued to show remarkable resilience in 2023,” the IMF said in a report last week. “However, headwinds are re-emerging in 2024, with growth expected to soften to 3%–4% due to uncertainty about the ongoing war and as supply constraints become more binding.”
Challenges remain. Poland has led a demand to block some of Ukraine’s food sales into the European Union to protect its own farmers, in one sign of fatigue among the embattled nation’s allies. Delays in foreign aid from the US and the EU are testing Kyiv’s ability to defend itself and fund its budget. Ukraine’s army is struggling to maintain manpower to defend against Russian advances, while employers face an increasing labor shortage.
The fresh economic data has been eagerly anticipated by bondholders as Ukraine seeks to overhaul its debt before a two-year standstill expires later this year. The data on gross domestic product will also define how much the government will need to pay out on securities linked to economic growth — so called GDP warrants — if they are excluded from the restructuring deal. The warrants are trading at the highest level since the start of the war, above 56 cents on the dollar.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.