Working paper

The Ukrainian war economy

This paper analyses Ukraine’s war economy management and performance, according to information available in June 2023.

Publishing date
11 July 2023
Humanitarian Assistance For displaced People

Executive summary

Ukraine has been subject to full-scale Russian aggression since 24 February 2022, with major implications for Ukraine’s economic performance and economic management. Martial law has temporarily restricted civil and political rights and allowed the government to introduce command management in the economic sphere. These war-related prerogatives have been used only partly (for example, in the energy and transportation sectors, restricting convertibility of the hryvnia and banking transactions with foreign currency), while the dominant role of the private sector and market forces has been maintained in other respects. 

As a result of war damages and territorial losses, Ukraine’s real GDP contracted by about 30 percent in 2022. Ukraine also experienced severe balance-of-payments and budget tensions in the first months of the war. Intensification of foreign financial aid from the second half of 2022 helped to achieve relative macroeconomic stability in the first half of 2023. The prospects of the Ukrainian economy depend on the length of the war, associated damages and the size of external financial aid.

Before February 2022, Ukraine’s record of economic and governance reform was mixed; the war stopped most reforms. On the other hand, obtaining European Union candidate status in June 2022 provided a new incentive to implement comprehensive governance reforms related, in particular, to the judicial system, media, national minorities, public transparency and fighting corruption.

The authors would like to thank Francesco Nicoli and Georg Zachmann for their valuable comments on a draft of this working paper.


About the authors

  • Dmytro Boyarchuk

    GlobalSource Partner’s Ukraine Country Analyst Dmytro Boyarchuk is a leading authority on the country’s macro and political dynamics and its regional integration. He is recognized throughout the region for his thorough and unbiased approach to the issues facing Ukraine’s progress and development.

    Based in Kiev, Mr. Boyarchuk is also Executive Director of the Ukraine Office of the Center for Social and Economic Research, CASE Ukraine. The successor to the Macroeconomic Reform Project of the Harvard Institute of International Development, CASE Ukraine is the premier regional independent NGO specializing in economic research, macroeconomic policy analysis and forecasting.

    Mr. Boyarchuk has led several Blue Ribbon Commissions on Ukraine’s reform strategy, especially fiscal and tax reform. He is also an authority on regional labor economics, private sector development and trade. He has led research projects on Ukraine’s agriculture, health, education, and public service sectors and on its prospects for financial liberalization. He has also worked on projects evaluating fiscal liberalization projects in former Soviet republics in Central Asia.

    Mr. Boyarchuk received a B.A. in economics (with honors) and an M.A. in economics from the National University of Kyiv-Mohyla Academy.

  • Marek Dabrowski

    Dr. Marek Dabrowski is a Non-Resident Scholar at Bruegel, co-founder and Fellow at CASE - Centre for Social and Economic Research in Warsaw and Visiting Professor at the Central European University in Vienna.

    He was Chairman of the CASE Supervisory Council and its President of Management Board (1991-2011), Chairman of the Supervisory Board of CASE Ukraine in Kyiv (1999-2009 and 2013-2015), Member of the Board of Trustees and Scientific Council of the E.T. Gaidar Institute for Economic Policy in Moscow (1996-2016), Professor at the Higher School of Economics in Moscow (2014-2022), and Fellow under the 2014-2015 Fellowship Initiative of the European Commission – Directorate General for Economic and Financial Affairs. He is a former First Deputy Minister of Finance of Poland (1989-1990), Member of Parliament (1991-1993) and Member of the Monetary Policy Council of the National Bank of Poland (1998-2004).

    Since the end of 1980s he has been involved in policy advising and policy research in Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Egypt, Georgia, Iraq, Kazakhstan, Kyrgyzstan, Macedonia, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Saudi Arabia, Serbia, Somali, Syria, Turkmenistan, Ukraine, Uzbekistan and Yemen, and in a number of international research projects related to monetary and fiscal policies, growth and poverty, currency crises, international financial architecture, perspectives of European integration, European Neighborhood Policy, trade policy, and political economy of transition.

    He has also worked as a consultant in a number of EU, World Bank, IMF, UNDP, OECD and USAID projects. Marek is the author of several academic and policy papers, and editor of several book publications.

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