In 2023, Ukraine’s economy grew by 5.3% despite ongoing Russian missile and drone attacks. Despite these challenges, the country reasserted control over a Black Sea export corridor and had a bumper crop. Preliminary data from the State Statistics Service showed that the economy expanded by 4.7% in the last quarter of the year, marking a third consecutive quarter of growth.

The International Monetary Fund (IMF) took note of Ukraine’s remarkable resilience in 2023 but warned of challenges ahead in 2024. The IMF expects growth to soften to 3%-4%, due to uncertainty surrounding the ongoing war and increasing supply constraints. There are several obstacles that Ukraine must overcome, including demands from Poland to block some of its food sales into the European Union to protect Polish farmers, delays in foreign aid, and a labor shortage that is impacting employers.

As Ukraine seeks to overhaul its debt before a two-year standstill expires later this year, bondholders eagerly await economic data. This data will determine the government’s payments on securities linked to economic growth, known as GDP warrants. These warrants are currently trading at a high level, above 56 cents on the dollar.

Despite these challenges ahead, Ukraine’s economy has shown resilience and growth in the face of adversity, and the country is working to address the obstacles it faces in order to continue its economic recovery.