Ukrainian banks expect further growth in their business and household loan portfolios over the next 12 months, as well as an increase in demand for all types of corporate and retail loans in the third quarter, according to the results of a survey by the National Bank of Ukraine (NBU).
At the same time, these expectations have become more subdued: the balance of responses regarding growth in the business loan portfolio fell to 38.2% from 72.2% in the first quarter of 2026, and for retail loans—to 38.9% from 65.1%.
Banks forecast a slight improvement in the quality of the corporate loan portfolio over the next 12 months: the balance of responses stood at 7.3% compared to 7.1% a quarter earlier. At the same time, for the fourth consecutive quarter, respondents expect the quality of loans to households to deteriorate, although the corresponding balance has become less negative—“minus” 16.3% versus “minus” 17%.
Financial institutions also expect growth in deposits from businesses and households. The balance of responses regarding the expected change in the volume of corporate sector deposits rose to 53.7% from 50.7%, reaching its highest level since the start of the full-scale invasion, while the balance for household deposits rose to 53.8% from 53.3%.
In the second quarter, business demand for loans increased: the overall balance of responses rose to 35.5% from 34.4% in January–March, also reaching its highest level since the start of the full-scale invasion.
Demand for long-term loans saw the sharpest increase—rising to 35.4% from 24.6%. Demand for loans to small and medium-sized enterprises (SMEs) rose to 24.7% from 23.8%, while demand for loans to large enterprises also increased, though at a slower pace than a quarter ago: the balance of responses fell to 26.9% from 34%.
Banks cited the need for capital investments and working capital as the main drivers of the growth in corporate demand. In the third quarter, they expect demand to increase for all types of business loans, particularly long-term ones.
Household demand also rose in the second quarter for both mortgage and consumer loans. According to banks’ estimates, demand for consumer loans has been growing since the second quarter of 2023, and for mortgages—since the beginning of 2025.
In July–September, respondents expect a further increase in household demand for loans, particularly for mortgages. Several large banks cited lower borrowing costs and improved prospects for the real estate market as the main drivers of rising mortgage demand.
Lending standards for the corporate sector remained virtually unchanged in the second quarter: the balance of responses stood at 1.7%, compared with “minus” 2.9% a quarter earlier. Standards for SMEs eased, though to a lesser extent than in January–March: “minus” 3.3% versus “minus” 25.2%.
In the third quarter, banks generally do not plan to change their corporate lending standards but expect them to ease for SME loans.
The approval rate for business loan applications remained largely unchanged in the second quarter: the balance of responses stood at 0% compared to 12.6% a quarter earlier. At the same time, for SMEs, it stood at 13% versus 24.4%, as some banks reported the possibility of providing them with larger loans.
For households, banks eased standards in the second quarter for both mortgages and consumer loans. For mortgages, the net balance of responses fell to “minus” 14.9% from zero, while for consumer loans it stood at “minus” 21.5% compared with “minus” 23.1% a quarter earlier.
Competition among banks remained the main factor behind the easing of consumer lending standards. For mortgages, additional factors included expectations regarding overall economic activity and the outlook for the real estate market.
Banks also expect a further easing of standards for both mortgage and consumer loans in the third quarter.
The approval rate for household loan applications rose in April–June. Banks reported lower interest rates, higher loan amounts, and longer terms for consumer loans, as well as lower mortgage costs and somewhat stricter collateral requirements for mortgages.
Banks assessed the debt burden on businesses in the second quarter as moderate, although assessments regarding SMEs tended toward the low end of the scale. The debt burden on households remained low.
In the second quarter, banks recorded an increase in credit, foreign exchange, and liquidity risks. The balance of responses regarding credit risk rose to 30.3% from 24.9% a quarter ago; for foreign exchange risk, it stood at 14.5% versus 21.3%; for liquidity risk, 8.4% versus 18.8%; while interest rate and operational risks remained largely unchanged.
At the same time, respondents expect currency and credit risks, in particular, to intensify in the third quarter.
The survey was conducted from June 16 to July 8, 2026, among credit managers at 25 banks, which accounted for 96% of the banking system’s total assets.
BANK, BUSINESS, LOAN, NBU, POPULATION
According to Interfax-Ukraine, this article presents key macroeconomic indicators for Ukraine and the global economy as of the end of April 2026. The analysis is based on data from the State Statistics Service of Ukraine, the National Bank of Ukraine, the Ministry of Finance, the State Customs Service, the International Monetary Fund, Eurostat, BEA, BLS, NBS, ONS, TurkStat, IBGE, and other official institutions. Monthly and quarterly statistical data published after the end of the reporting period were used for April indicators.
Maksim Urakin, Ph.D. in Economics and founder of the information and analytical center Experts Club, presented an overview of the key trends that shaped the state of the Ukrainian and global economies in April and early May 2026.
Ukraine’s Macroeconomic Indicators
As of the end of April, the Ukrainian economy remained macro-financially stable, although inflationary, currency, and foreign trade risks had intensified. Compared to March, consumer inflation accelerated, international reserves declined for the third consecutive month, and the trade deficit continued to widen. At the same time, the government ensured funding for defense, social benefits, and critical budgetary needs, while the National Bank of Ukraine (NBU) maintained control over the foreign exchange market.
According to a preliminary estimate by the State Statistics Service, Ukraine’s real GDP in the first quarter of 2026 decreased by 0.6% compared to the first quarter of 2025. On a seasonally adjusted basis, the decline was 0.7% compared to the previous quarter.
Nominal GDP amounted to 2,047.2 billion UAH. This negative trend was attributed to electricity shortages, infrastructure damage, delays in external financing, weak investment activity, and adverse weather conditions at the beginning of the year. At the same time, private consumption remained relatively stable, while the manufacturing sector, trade, and certain service sectors showed growth.
In its April forecast, the National Bank revised downward its estimate for Ukraine’s real GDP growth in 2026 to 1.3%. The main reasons were further damage to energy and logistics infrastructure, a larger electricity shortage, high energy prices, and weaker first-quarter results. The NBU expected economic growth to be supported by consumer demand and investments in reconstruction and the defense-industrial complex, but did not forecast a rapid transition to a sustainable recovery.
“The first-quarter results confirmed that the Ukrainian economy remains extremely sensitive to energy, military, and fiscal shocks. Positive domestic demand and business resilience can no longer fully offset the losses from infrastructure destruction, electricity shortages, and weak exports. The 1.3% growth forecast implies actual stagnation on a per-capita basis. “Therefore, the main priority should be not only to maintain financial stability but also to restore production capacity,” Urakin noted.
The inflation situation worsened in April. Consumer inflation accelerated to 8.6% year-over-year, up from 7.9% in March. Prices rose by 1.4% over the month and by 4.9% since the beginning of the year. Core inflation rose to 7.6% year-over-year, inflation for services reached 13.3%, and the increase in fuel prices hit 36.1% year-over-year.
The main source of inflationary pressure was the rise in energy and fuel prices, which increased business costs for logistics, electricity, and production. Additional factors included wage increases, the pass-through of the hryvnia’s earlier depreciation to consumer prices, and rising costs of certain food products and transportation services. Bread, grains, sunflower oil, fish, restaurant services, and household services saw the fastest price increases.
The NBU’s April forecast projected that inflation would accelerate to 9.4% by the end of 2026. A return to a steady decline was expected in 2027, when inflation was projected to slow to 6.5%, and to reach the 5% target in 2028.
On April 30, the National Bank’s Board kept the policy rate at 15% per annum. The regulator explained the decision by the need to maintain the attractiveness of hryvnia-denominated assets, keep inflation expectations under control, and ensure the stability of the foreign exchange market. The NBU’s forecast called for keeping the rate at 15% at least until the second quarter of 2027. In the event of further intensification of price pressures, the regulator did not rule out the use of additional measures, including a rate hike.
“The acceleration of inflation to 8.6% and the sharp rise in fuel prices left the National Bank no room to continue its policy easing cycle. Under current conditions, the 15% rate is not so much a tool for curbing lending as it is a mechanism for safeguarding confidence in the hryvnia. The risk of a premature rate cut now significantly outweighs the potential short-term effect on economic activity,” Urakin emphasized.
The foreign exchange sector remained under control but required significant support from the regulator. As of May 1, 2026, Ukraine’s international reserves stood at $48.215 billion, having declined by 7.3% in April. This marked the third consecutive monthly decline in reserves.
In April, the NBU sold $3.577 billion on the foreign exchange market, while inflows into the government’s foreign currency accounts totaled only $377.9 million. $716.6 million was allocated to service and repay foreign-currency government debt, and Ukraine paid another $255.3 million to the IMF. The losses were partially offset by a positive revaluation of financial instruments amounting to $378 million. Despite the decline, the reserves were sufficient to finance 4.9 months of future imports.
“The decline in reserves from nearly $52 billion to $48.2 billion in a single month is significant, but not yet critical. Far more important is the underlying cause: the private foreign exchange market remains structurally in deficit, and international inflows do not always coincide with the timing of intervention needs and debt payments. Therefore, the stability of the hryvnia will continue to depend on the regularity of external financing and Ukraine’s ability to narrow the trade gap,” Urakin believes.
According to the State Customs Service, Ukraine’s trade turnover in January–April 2026 amounted to $46.1 billion. Imports reached $32.2 billion, while exports totaled $13.9 billion. Thus, the trade deficit for the four-month period was approximately $18.3 billion, with imports exceeding exports by a factor of 2.3.
Ukraine imported the most goods from China—$8.7 billion—followed by Poland—$3.1 billion—and Turkey—$2.2 billion. The main destinations for Ukrainian exports were Poland—$1.5 billion—Turkey—$1.2 billion—and Italy—$857 million.
In the import structure, machinery, equipment, and transportation accounted for $13.3 billion; fuel and energy products—$5.3 billion; and chemical industry products—$4.6 billion. Exports were primarily driven by food products at $8.5 billion, metals and metal products at $1.3 billion, and machinery, equipment, and transportation at $1.2 billion.
“The increase in the trade deficit to $18.3 billion in just four months is one of the main macroeconomic challenges. A significant portion of imports is objectively necessary—these include energy resources, equipment, transportation, and defense products. However, the export base remains too narrow and reliant on raw materials. Without the development of processing, machine building, the defense industry, and service exports, Ukraine will continue to offset the trade deficit with international aid and reserves,” Urakin emphasized.
The budgetary situation remained tense but under control. From January through April, the general fund of the state budget received 1.04 trillion UAH. Total cash expenditures from the general fund amounted to 1.35 trillion UAH, which is 13.8% more than during the same period in 2025. In April alone, General Fund revenues totaled 302.6 billion hryvnias, while expenditures amounted to 433.1 billion hryvnias.
Expenditures on security and defense over the four-month period reached 854.1 billion hryvnias, or 63.3% of all General Fund expenditures. In April, 283.1 billion hryvnias were allocated for these purposes. UAH 555.5 billion was spent on public sector wages and related benefits, UAH 235 billion on social security, UAH 205.4 billion on subsidies and transfers to enterprises, UAH 151.4 billion on goods and services, and UAH 103.2 billion on servicing the national debt.
International grants for January–April totaled 228.2 billion hryvnias, with 55.1 billion hryvnias received in April alone. In total, 1.43 trillion hryvnias flowed into the general and special funds of the state budget over the four-month period, while state budget cash expenditures amounted to 1.7 trillion hryvnias.
“The budget remains functional, but its structure is entirely dictated by the war. When nearly two-thirds of the general fund’s expenditures are directed toward defense and security, the capacity to finance long-term development remains limited. Under these conditions, it is particularly important that international aid cover the budget’s civilian needs, while domestic resources are directed as effectively as possible toward defense, energy, and industrial recovery,” Urakin noted.
The Global Economy
As of the end of April 2026, the global economy remained resilient, but the geopolitical and inflationary environment had deteriorated significantly. The war in the Middle East caused energy prices to rise, heightened inflationary expectations, and forced major central banks to postpone further monetary easing.
In its April World Economic Outlook, the International Monetary Fund projected global economic growth of 3.1% in 2026 and 3.2% in 2027, assuming the conflict would be limited in duration and scope. The IMF warned that a longer war, deepening geopolitical fragmentation, new trade disputes, and high public debt could significantly worsen the outlook.
The U.S. economy maintained positive momentum. According to the BEA’s revised estimate, real GDP in the first quarter of 2026 grew by 2.1% on an annualized basis compared with the previous quarter. Growth was driven by investment, exports, and government and consumer spending.
At the same time, inflation in the U.S. continued to accelerate. In April, the CPI rose by 3.8% year-over-year, following a 3.3% increase in March. Core inflation stood at 2.8%, while energy inflation reached 17.9%. In just one month, energy prices rose by 3.8%, and gasoline prices by 5.4%.
On April 29, the Federal Reserve kept the federal funds rate target range at 3.5–3.75%. The Fed cited elevated inflation, rising global energy prices, and high uncertainty surrounding events in the Middle East.
The eurozone showed significantly weaker economic momentum. According to a preliminary Eurostat estimate released on April 30, eurozone GDP in the first quarter grew by only 0.1% compared to the previous quarter and by 0.8% year-over-year. This indicated that the region’s economy was effectively stagnating.
Annual inflation in the eurozone accelerated to 3.0% in April, up from 2.6% in March. In the European Union, it rose to 3.2%. Services, energy, and food made the largest contributions to the rise in prices.
On April 30, the European Central Bank kept its deposit rate at 2.0%, its main refinancing rate at 2.15%, and its marginal lending rate at 2.40%. The ECB emphasized that risks of rising inflation and a slowdown in economic growth had intensified due to the energy shock.
In the United Kingdom, by contrast, inflation slowed to 2.8% year-over-year in April, down from 3.3% in March. Core CPI fell to 2.5%, and services inflation to 3.2%. At the same time, motor fuel prices rose significantly due to the external energy shock.
On April 30, the Bank of England kept its base rate at 3.75%. Eight members of the Monetary Policy Committee supported this decision, while one voted to raise the rate to 4%.
“April showed that the global cycle of rapid interest rate cuts has effectively been put on hold. The U.S. faced accelerating inflation to 3.8%, the eurozone to 3%, and central banks were once again forced to focus on energy risks. For Ukraine, this means more expensive global capital, more challenging conditions for exports, and additional pressure due to fuel prices,” Urakin noted.
China’s economy grew by 5.0% year-over-year in the first quarter of 2026. Nominal GDP reached 33.419 trillion yuan. Industrial production increased by 6.1%, the services sector by 5.2%, and foreign trade in goods by 15%. At the same time, real estate investment fell by 11.2%, indicating that structural problems persist. In April, China’s CPI rose by 1.2% year-over-year and by 0.3% month-over-month. Average inflation for January–April stood at 0.9%. Meanwhile, retail sales in April grew by only 0.2% year-over-year, indicating weakness in domestic consumer demand.
India maintained the highest growth rates among major economies. Following the transition to a new statistical base, the official estimate for real GDP growth in fiscal year 2025/26 was raised to 7.6%, and nominal GDP growth to 8.6%. The main drivers remained the services sector, domestic consumption, construction, and government investment.
Turkey again faced a sharp spike in inflation in April. Consumer prices rose by 4.18% month-over-month and by 32.37% year-over-year. Year-to-date inflation stood at 14.64%. The figure exceeded March’s level of 30.87%, indicating the instability of the disinflation process. At the same time, Turkey’s GDP grew by approximately 3.6% in 2025, confirming the economy’s ability to sustain business activity even amid high price pressures.
Brazil showed more balanced dynamics, although inflation also accelerated. The country’s GDP grew by 2.3% in 2025, reaching 12.7 trillion reais at current prices. In April 2026, the IPCA index rose by 0.67% month-over-month, and annual inflation reached 4.39%, up from 4.14% in March. The largest contributions came from food, medical goods, and services.
“China, India, Turkey, and Brazil demonstrate four distinct development models. China maintains high growth rates thanks to industry and exports, but still faces challenges with domestic demand and real estate. India relies on demographics, services, and investment. Turkey sustains growth at the cost of very high inflation. Brazil is moving more slowly but is trying to strike a balance between economic activity and price stability. “For Ukraine, the main conclusion is that long-term growth is impossible without its own manufacturing, technological, and export base,” Urakin believes.
Conclusions
As of the end of April 2026, Ukraine maintained macrofinancial stability, but key indicators pointed to increasing risks. Real GDP contracted by 0.6% year-over-year in the first quarter; inflation accelerated to 8.6% in April, with core inflation rising to 7.6%, while the policy rate remained at 15%.
International reserves fell to $48.2 billion, a decrease of 7.3% over the month. The trade deficit for January–April reached $18.3 billion. Revenues to the general fund of the state budget totaled 1.04 trillion UAH, while expenditures amounted to 1.35 trillion UAH. UAH 854.1 billion, or 63.3% of all general fund expenditures, was allocated to security and defense.
Positive factors included substantial reserves, a controlled exchange rate policy, international financing, steady consumer demand, business adaptability, and the development of defense production. The main risks were the continuation of the war, the destruction of energy infrastructure, rising fuel prices, labor shortages, weak exports, and the budget’s dependence on foreign aid.
The global economy also entered a more challenging period. The IMF projected global growth of 3.1% in 2026 but warned that downside risks predominated. Inflation in the U.S. accelerated to 3.8%, and in the eurozone to 3.0%, while the central banks of the U.S., the eurozone, and the United Kingdom kept interest rates unchanged. China grew by 5% in the first quarter, India maintained a growth rate of over 7%, while Turkey once again faced inflation exceeding 32%.
“April 2026 showed that Ukraine’s stabilization model remains viable, but its financial buffer is shrinking. The simultaneous acceleration of inflation, depletion of reserves, and widening of the trade deficit signal that external aid cannot be the sole foundation of economic stability. Ukraine needs to transition from financing its immediate survival to creating a new production model. This model should be based on energy self-sufficiency, the defense-industrial complex, agricultural processing, machine building, logistics, digital technologies, and exports of high-value-added products. “Only such a transition can transform macrofinancial stability from a temporary safety net into the foundation for long-term development,” concluded Maksym Urakin.
Ukrainian male and female veterans won medals at the 2026 World Medieval Combat Championships in Denmark, according to the Ministry of Veterans Affairs.
“From July 23 to 26, 2026, Spøttrup Castle in Denmark hosted the 2026 Medieval Combat World Championships—one of the largest international medieval combat tournaments, which annually brings together athletes from dozens of countries around the world… Ukraine was represented at the competition by the Ukrainian National Medieval Combat Team, which included male and female veterans as well as active-duty military personnel. They have already proven their dedication to Ukraine by defending it with weapons in hand, and now they are proudly representing our country on the international sports stage,” the ministry’s statement reads.Specifically, Ukrainian veterans won one first-place finish, six second-place finishes, and four third-place finishes in various competitions.
It is noted that the Ukrainian veterans’ team’s participation in the 2026 Medieval Combat World Championships is not only a sporting representation of the state but also a vivid testament to the resilience of Ukrainian veterans, their strength of spirit, and their drive for new victories.
Medieval combat is a modern international full-contact sport in which participants compete in historically accurate armor using safe replicas of medieval weapons. The World Championships include both individual and team disciplines.
Germany’s GDP rose by 0.2% in the second quarter compared to the previous three months, according to the Federal Statistical Office, which released preliminary data. The consensus forecast by experts, as cited by Trading Economics, had predicted growth of 0.1%.
Germany’s year-over-year economic growth was 0.9%, while experts had expected growth of 0.6%.
In the first quarter, Germany’s GDP increased by 0.4% compared to the previous three months and by 0.7% on an annual basis. The data for January–March were revised upward; previously, growth of 0.3% and 0.4%, respectively, had been reported.
According to preliminary data, exports in April–June rose compared to the first quarter, while consumer and government spending remained weak, and business investment declined.
Final data on Germany’s second-quarter GDP growth will be released on August 25.
France’s GDP rose by 0.2% in the second quarter compared with the previous three months, according to preliminary data from the National Institute of Statistics and Economic Studies (INSEE). This figure was in line with the consensus forecast by analysts, as reported by Trading Economics.
Exports rose by 2.6% last quarter, while imports rose by 0.8%.
Consumer spending rose by 0.2%, while government spending increased by 0.4%. Gross fixed capital formation declined by 0.3%.
Economic growth in April–June stood at 0.7% compared to the same period in 2025. Experts had forecast growth of 0.8%.
In the first quarter, GDP contracted by 0.1% compared to the previous quarter and grew by 0.8% year-over-year.
Final data on the country’s GDP growth for the second quarter will be released on August 28.
The government has once again approved and submitted to the Verkhovna Rada a bill introducing value-added tax (VAT) on international postal shipments to Ukraine valued at up to 150 euros, Prime Minister Serhiy Koretskyi announced on Telegram on Wednesday evening.
“We must create a level playing field for all market participants. This is a matter of supporting Ukrainian manufacturers and ensuring fair competition. We expect this decision to generate over 10 billion hryvnias in additional budget revenue each year,” he noted.
The prime minister emphasized that Ukrainian manufacturers and sellers pay VAT, while some imported goods enjoy tax breaks.
“It is unacceptable that Ukrainian manufacturers—for example, in the light industry—pay taxes, while citizens buy clothing on foreign marketplaces, and those same goods are not taxed at all. It is equally unacceptable that a number of unscrupulous players split up their shipments to evade paying taxes,” the head of government stated.
Koretsky also noted that the repeal of the current exemption will bring Ukrainian regulations into line with European Union legislation.
“Importantly, personal gifts valued at up to 45 euros that are sent free of charge will, as before, remain tax-exempt,” the prime minister added.
According to him, if lawmakers support this decision, the new rules will take effect in 2027, giving businesses, marketplaces, and delivery operators time to prepare.
Separately, Koretsky instructed the Ministry of Finance and all relevant agencies to thoroughly discuss this issue with lawmakers at the committee level and with representatives of all factions and groups, as well as to explain in detail to the public the provisions of the bill and the need for its adoption.
As previously reported, the Verkhovna Rada’s adoption of the bill to abolish the tax exemption for international parcels valued at up to 150 euros is a condition for Ukraine to receive the third tranche under the program with the International Monetary Fund in the amount of approximately 0. 7 billion, and the second tranche of macro-financial assistance from the
European Union in the amount of 3.7 billion euros as part of a 90 billion euro loan to support Ukraine.
In the updated Memorandum on Financial and Economic Policies under the IMF’s EFF program, Ukraine committed to adopting this law by the end of July as a new structural benchmark, whereas the original version required its approval by the end of March along with other tax regulations; however, that structural benchmark was not met.
