The Economy Is in a Coma, but Ukraine’s Central Bank Keeps Reporting a Strong Pulse

While businesses lose staff and struggle with blackouts, the regulator notes “improved sentiment.” Perhaps among those still left alive.

Ukraine’s central bank has released its latest Business Outlook Survey for the first quarter of 2025, reporting a notable rise in business sentiment — despite the backdrop of war, labor shortages, and macroeconomic instability.

The Business Expectations Index rose to 108.2, up from 101.8 in the previous quarter. A growing share of firms expect increases in production, hiring, and capital investment. Inflation expectations climbed to 11.5%, while the projected exchange rate remains above UAH 44 per U.S. dollar.

The upbeat tone contrasts sharply with the realities many businesses face on the ground: disrupted supply chains, energy blackouts, mobilization-driven staffing crises, and shrinking access to affordable credit.

Analysts warn that the survey may present a misleadingly optimistic snapshot of an economy operating under severe wartime stress. “These responses reflect the outlook of businesses still standing,” said one Kyiv-based economist. “But they exclude the thousands of small and medium-sized enterprises that have shut down or are barely functioning.”

Only about one-third of firms plan to apply for bank loans — a figure that remains flat despite acute liquidity needs. Prohibitive interest rates and high collateral requirements remain the main obstacles to borrowing. The central bank report acknowledges these issues but downplays their scale, instead emphasizing a stable level of demand for financing.

Observers have also raised concerns about the survey’s transparency. It offers no breakdown by sector, region, or company size — a critical omission in an economy fragmented by war. “Without granular data, it’s hard to know whether optimism is driven by exporters, agribusinesses, or simply survivors,” said a Ukrainian trade consultant.

Despite its hopeful framing, the report reads more like a reflection of economic endurance than evidence of genuine recovery. As one business owner in western Ukraine put it, “We’re not growing. We’re breathing.”

The full survey is available via the National Bank of Ukraine.