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Ukrainian economy continues to recover, but inflation is projected to rise

  • Key Message Update
  • Ukraine
  • January 2024
Ukrainian economy continues to recover, but inflation is projected to rise

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  • Key Messages
  • Key Messages
    • According to the Ukrainian Deputy Chairman of the Ukrainian Agrarian Council, Ukraine has enough surplus grain and oilseeds to export another 36-40 million tons in the second half of the 2023/24 marketing year (July 2023 to June 2024). In the first half of the marketing year, which saw reduced export volumes following disruptions related to Russia’s withdrawal from the Black Sea Grain Corridor deal, Ukraine exported over 20 million tons or grains and oilseeds. Since then, however, export supply chains have recovered to pre-invasion levels, facilitated by the continued success of the humanitarian shipping corridor. Most recently, in December 2023, Ukraine exported more than 7 million tons of agricultural commodities. Should this pace of exports continue for the remaining six months of the marketing year, Ukraine would be capable of exporting the full 36-40 million tons of available grain and oilseeds. 
    • Although the Ukrainian economy continues to face challenges related to the conflict, gradual economic recovery continues. The National Bank of Ukraine lowered interest rates three times in 2023, with the key policy rate reaching 15 percent as of December 2023 (down from 25 percent). This is expected to be supporting investment and general business and income-earning activity. However, Ukrainians continue to contend with high inflation, with the national annual inflation rate projected to increase from 5 percent to 8.6 percent by the end of 2024. In this environment of rising consumer prices, government social support programs continue to play a key role in mitigating negative impacts on food security among Ukrainians. These programs include supplemental income for eligible households, livelihood support programs including low-interest loans for farmers and small businesses, and affordable housing programs
    • The FAO global food price index declined by 1.5 percent from November to December 2023, driven by declines in the sugar, vegetable oils, and meat indexes. As of December, the value of the index was 10 percent lower than the same time last year and around 26 percent lower than peak levels recorded in 2022. The cereal price index rose marginally by 1.5 percent from November to December, driven by weather-related disruptions to logistics in key exporter countries, concerns about planting in Brazil, and some lingering concerns about tensions in the Black Sea. Ukraine remains an important global supplier of wheat, maize, and oilseed exports; however, the more important concerns for global commodity markets currently relate to weather conditions associated with crop production outcomes in major producer countries as well as the consequences of recent disruptions to global shipping in several locations around the world.

    Recommended citation: FEWS NET. Ukraine Key Message Update January 2024: Ukrainian economy continues to recover, but inflation is projected to rise, 2024.

    This Key Message Update provides a high-level analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography. Learn more here.

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