The Ukrainian Economy Ministry estimated real GDP growth in September at 3.8% y-o-y (+/-1pp), bringing the 9M24 tally to 4.5% y-o-y. An early start to the harvest of late crops was the main growth driver last month, according to the Ministry, while in 9M24 the economy was supported by expanding domestic demand, stable operations of domestic Black Sea ports, and government spending on repairs of critical infrastructure and roads. At the same time, shortages of qualified labor remained the main drag on economic activity.

The Ukrainian economy has performed in line with our expectations thus far in 2024, with full-year real GDP growth approaching 4.0%, supported by robust seaborne exports and expanding domestic consumption but restrained by power shortages and exacerbating labor deficit.

Ukraine ran a $2.8bn merchandise trade deficit in September, with exports totaling $3.3bn (+22% y-o-y) and imports $6.0bn (+12% y-o-y). In 9M24, the merchandise trade gap widened slightly y-o-y to $20.4bn from $19.4bn in 9M23 as imports rose by 10% ($4.7bn) y-o-y to $51.2bn and exports increased by 14% ($3.7bn) to $30.8bn.

Ukraine’s iron ore exports stood at 25.3 Mt in 9M24 (+100% y-o-y), implying September sales fell by 23% m-o-m to 1.9 Mt (still +34% y-o-y). In value terms, iron ore exports totaled $2.2bn in 9M24 (+64% y-o-y), suggesting a 29% m-o-m drop in September to $142m (flat y-o-y).   September steel exports grew by 5.0% m-o-m to 470 kt (+34% y-o-y), bringing the 9M24 volume to 3.3 Mt (+55% y-o-y). In value terms, monthly steel exports went up by 5.3% m-o-m to $272m (+40% y-o-y), totaling $1.9bn in 9M24 (+43% y-o-y).

WSE-listed Kernel Holding, Ukraine’s largest sunflower oil producer and grain exporter, has announced the repayment of a $300m Eurobond as it matured on Oct. 17.

President Volodymyr Zelensky addressed Ukrainian parliament yesterday to present his “victory plan,” which he previously discussed with US President Joe Biden and other Western leaders and said was intended to compel Russia to agree to negotiate in a good-faith manner. The plan consists of five points and three classified addenda as follows: Geopolitics: extending an invitation to Ukraine to join NATO “now”, with membership to follow later, to show Russian President Vladimir Putin that “his geopolitical calculations have failed.”

According to a Sep. 20-26 nationwide poll by Razumkov Center, an independent think tank, 83% of respondents said they remained confident about Ukraine’s eventual victory in the war against Russia, up from 80% in the previous poll in June, with 11% not believing in a victorious outcome (unchanged from June). In other findings, 56% expressed opposition to holding presidential or parliamentary elections while the war continued (vs. 59% in June), while 28% said elections were needed, up from 22% in the previous poll. At the same time, public trust in non-state institutions remained much higher than in government bodies, with over 90% of respondents expressing trust in the army and 80% in volunteer organizations, close to 50% having confidence in the presidency but only 16-20% trusting the government and parliament. Among national political leaders, President Volodymyr Zelensky retained the highest trust score of 10%, with 51% of respondents expressing confidence in him, yet both indicators continued to sink gradually, down from 16% and 54% in June and 47% and 71%, respectively, in December 2023.

DTEK Energy CEO Oleksandr Fomenko said the company has invested UAH 8.3bn ($202m) to prepare for the coming heating season and plans to boost relevant CAPEX to over UAH 11bn ($270m) by year-end. In particular, DTEK invested UAH 6bn ($146m) in coal CAPEX and UAH 2.3bn ($56m) in its thermal power plants, expecting to increase these amounts to UAH 7.7bn ($187m) and UAH 3.8bn ($93m), respectively, by year-end.

NBU Governor Andriy Pyshnyi has said the central bank is satisfied with its current exchange rate policy and not preparing any radical changes. Among policy success indicators, Pyshnyi said the volume of interbank F/X market operations conducted without NBU participation has tripled following the central bank’s shift to managed UAH:USD flexibility a year ago, to $110m per day, while the spread between the official and cash market exchange rates has virtually disappeared.

The Ministry of Finance placed UAH 12.9bn ($312m) of hryvnia-denominated bonds and $50m of F/X-denominated paper at a primary auction yesterday.

According to a Sep. 20-Oct. 3 poll conducted by the Kyiv International Institute for Sociology (KIIS), a private pollster, 59% of respondents said they trusted President Volodymyr Zelensky, unchanged from May this year but down from 77% last December and a high of 90% in May 2022, less than three months after the Russian invasion. The share of those distrusting the president stood at 36%, also virtually unchanged from May and up from 22% in December 2023 and 7% in May 2022.

IMF has revised its charges and surcharges policy effective Nov. 1, 2024.

Key highlights from last week: Russian territorial gains in Ukraine slow despite higher intensity of attacks, with most of the fighting going on around Pokrovsk Russian forces attack Ukrainian bridgehead in Kursk region, forcing partial Ukrainian withdrawal Next Ramstein Group meeting on military aid for Ukraine reportedly put off until after US presidential elections

State rail monopoly Ukrainian Railways (RAILUA) reported freight transportation of 13.8 Mt in September, down 2.4% m-o-m but up 15% y-o-y.

The Ukrainian Cabinet of Ministers approved on Friday the privatization sale of a 100% stake in UMCC-Titanium, Ukraine’s largest producer of titanium ore, to the Ukrainian subsidiary of NEQSOL Holding, the owner of Vodafone Ukraine (VFU).

Ukrenergo’s acting CEO, Oleksiy Brekht, said in a media interview that the company had asked the National Energy and Utilities Regulatory Commission (NERC) to increase its transmission tariff by 47% y-o-y to UAH 780/MWh in 2025 in order to ensure full compensation for subsidies paid to renewable power producers (up from 50% currently) and thus profitable operations next year. However NERC is likely to approve a lower tariff hike.