State rail monopoly Ukrainian Railways (RAILUA) may receive up to UAH 7.6bn of state support in 2025 ($184m), including UAH 4.5bn from the state budget to fund acquisitions of passenger rail cars and another UAH 3.0bn for procurements and rail network development channeled from IFI funding.

At an auction organized by Ukraine’s state telecom regulator, Vodafone Ukraine (VFU) acquired licenses for 2,100 MHz and 2,600 MHz bands for 4G spectrum, for a combined UAH 988m ($24m).

According to a Reuters report this morning, Russia is open to discussing with Donald Trump a cessation of hostilities in Ukraine based off the prevailing battle lines. Russia’s other major condition is that Ukraine abandon efforts to join NATO and no NATO troops be deployed in Ukraine, but it is prepared to discuss security guarantees for Kyiv, according to the report.

The IMF and Ukrainian authorities reached a staff-level agreement (SLA) on the sixth review of the Fund’s $15.6bn 4-year EFF program, part of a $151bn support package for Ukraine. IMF mission chief Gavin Grey said the IMF Board’s approval of the review was “expected in the coming weeks,” following which Ukraine would receive a loan tranche of $1.1bn, the program’s seventh.

President Volodymyr Zelensky said Ukraine’s weapons production targets for 2025 included making 30,000 long-range strike drones and at least 3,000 cruise missiles and “rocket-drones” along with further increasing ammunition production on top of over 2.5 million mortar and artillery shells produced so far this year. Addressing parliament on the 1,000th day of the Russian invasion, Zelensky said “we will not abandon Ukraine’s right to its entire territory” but cautioned that “it may be necessary for Ukraine to outlast someone in Moscow to … fully restore the integrity of our state.” He also reiterated that elections in Ukraine would be held only after “a just peace” was achieved. Addressing the issue of mobilization, Zelensky said the authorities did not plan to lower the conscription age but would instead offer incentives to people aged under 25 to join the army.

Parliament approved a 2025 state budget bill at second and final reading yesterday, making no major changes to the government’s proposal and leaving the deficit target at UAH 1,641bn (19% of the government’s nominal GDP forecast).

Ukraine’s real GDP rose by 1.3% y-o-y in October, slowing from 3.8% in September and bringing the 10M24 growth tally to 4.2% y-o-y, down from 4.5% in 9M24, according to Economy Ministry estimates. The ministry attributed last month’s slowdown to a drop in agricultural production as the harvest of late crops passed its peak. At the same time, reconstruction projects, stable transshipments at Black Sea ports, and robust industrial production, driven by military-related demand, supported economic activity in October.

State rail monopoly Ukrainian Railways (RAILUA) carried 15.1 Mt of freight in October, up 8.8% m-o-m and 11% y-o-y.

Metinvest reported 3Q24 iron ore production of 3.3 Mt, down 17% q-o-q and up 21% y-o-y, bringing 9M24 output to 12.2 Mt (+63% y-o-y).

Key highlights from last week: Russian forces expand envelopment of Kurakhove pocket in Donetsk region and makes gains around Kupyansk in Kharkiv region Russian offensives in Kursk region bring further gains US reportedly allows long-range strikes against targets in Russia Russian President Putin reiterates his recent maximalist conditions for an end to the war

Russia conducted another mass attack on the Ukrainian energy system on Nov. 17, its tenth such strike since March. The attack included 120 cruise, ballistic and other long-range missiles as well as 90 drones. The Ukrainian air defense reported intercepting 102 missiles and 42 drones, with another 43 drones jammed.

The European Commission has endorsed the disbursement of EUR 4.1bn in aid for Ukraine, part of the EUR 50bn four-year Ukraine Facility program and the second of quarterly Ukraine Facility tranches whose provision is linked to implementation of attached reforms and policy measures. The actual disbursement, including EUR 2.6bn in concessional loans and EUR 1.5bn in grants, is expected by year-end following its final approval by the Council of the EU. 

According to provisional data from State Customs Service, Ukraine’s 10M24 merchandise trade gap was virtually unchanged y-o-y at $23bn as exports increased by 16% ($4.9bn) to $34.7bn and imports rose by 10% ($5.2bn) to $57.4bn. Based on these data, the merchandise trade deficit stood at $2.3bn in October, narrowing from $2.8bn in September as exports jumped by 19% m-o-m to $3.9bn (+45% y-o-y) while imports rose a moderate 3.2% m-o-m to $6.2bn (+10% y-o-y).

Ukraine’s iron ore exports stood at 27.8 Mt in 10M24 (+96% y-o-y), implying October exports of 2.5 Mt, up 31% m-o-m and 65% y-o-y. In value terms, iron ore exports dropped by an est. 17% m-o-m to $167m (flat y-o-y), totaling $2.3bn in 10M24 (+59% y-o-y).

The National Energy and Utilities Regulatory Commission (NEURC) proposed to set Ukrenergo’s 2025 power transmission at UAH 665/MWh ($14.9/MWh or EUR13.7/MWh), up 26%.

Ukraine has received $1.4bn of grant financing from the US, the second tranche of a $7.8bn support package for 2024, bringing the total amount disbursed to $5.2bn. The funds were channeled via the World Bank and will be used to reimburse non-military budget expenditures, particularly teacher salaries.