Naftogaz reported 1H24 revenues of $3.7bn, up 1.1% h-o-h and 20% y-o-y, EBITDA of $1.4bn, up 18% h-o-h and 2x y-o-y, and net income of $626m, up 38% h-o-h and 3.5x y-o-y. The EBITDA margin rose by 5.7pp h-o-h and 16pp y-o-y to 39%.

The US will today announced a “surge” in its security assistance to Ukraine, according to a readout of President Joe Biden’s meeting with Ukrainian President Volodymyr Zelensky on the sidelines of the UN General Assembly on Wednesday. According to media reports, the new aid package may total a record $8bn.

According to the State Statistical Service, Ukraine’s real GDP rose by 3.7% y-o-y and 0.2% q-o-q in s/a non-annualized terms 2Q24, slowing from 6.5% y-o-y and 1.2% q-o-q s/a in 1Q24.

Ukrainian Defense Minister Rustem Umerov, in this week’s media appearances marking his first  year in office, disclosed some details about the ongoing expansion of the domestic defense industrial base.

The Ministry of Finance placed UAH 11.1bn ($267m) of hryvnia-denominated bonds and $150m of USD-denominated paper at a primary auction yesterday. A week earlier, the government sold UAH 12.3bn ($298m) of UAH bonds and EUR 24m in the F/X segment.

Ukrenergo has published a proposal to increase its power transmission by 48% to UAH 784/MWh from January 2025, with the dispatching tariff left almost unchanged at UAH 104.7/MWh.

Hryvnia-denominated loans issued by Ukrainian banks increased by 1.4% m-o-m to UAH 815bn in gross terms in August, on top of a 1.7% rise in July and bringing the y-o-y pace of lending growth to +16%. Outstanding F/X loans inched up by 0.2% m-o-m to $6.3bn in August (yet -6.6% y-o-y).

Key highlights from last week: Russian forces achieve small gains assaulting Ukrainian bridgehead in Kursk region and keep advancing around Pokrovsk inside Ukraine Ukraine successfully attacks major Russian ammunition arsenal President Zelensky travels to the US this week to present “victory plans” to US leadership

The European Commission proposed up to EUR 35bn on new exceptional macro-financial assistance (MFA) to Ukraine as part of the G7 Extraordinary Revenue Acceleration Loans for Ukraine (ERA) initiative, worth up to €45 billion. The Commission also proposed to establish the Ukraine Loan Cooperation Mechanism (LCM) funded by proceeds from immobilized Russian sovereign assets and contributions from EU member states and third countries. The LCM will provide Ukraine financial support which can be used to repay the exceptional MFA and other loans under ERA.

On Saturday, Russian forces shelled Metinvest’s Pokrovske Coal, with three projectiles reportedly falling on the mine’s premises and killing two workers and injuring another two.

The NBU Board left its key rate unchanged at 13.0% p.a., in line with its forward guidance, justifying the decision by the need to maintain the attractiveness of UAH-denominated assets and support F/X market stability amid accelerating inflation (7.5% y-o-y in August vs. 5.4% in July and 4.8% in June). However, the NBU amended the operational design of its monetary policy, cutting the rate on 3M certificates of deposit (CD) by 0.5pp to 15.5% (effective today) and that on refinancing loans by 1.0pp to 16.0% while leaving the rate on overnight CDs unchanged at 13.0%, equaling the key rate.

Ukraine’s merchandise trade deficit stood at $17.6bn in 8M24, widening slightly from $16.6bn in 8M23 as imports rose by 10% ($4.1bn) y-o-y to $45.2bn and exports increased by 13% ($3.1bn) y-o-y to $27.6bn.

Iron ore exports from Ukraine inched up by 1.1% m-o-m to 2.5 Mt in August (+65% y-o-y), bringing the 8M24 export volume to 23.3 Mt (+108% y-o-y). In value terms, iron ore exports slid by 12.1% m-o-m to $201m (+40% y-o-y), totaling $2.0bn in 8M24 (+72% y-o-y).

According to estimates from the Ukrainian Economy Ministry, real GDP growth accelerated to 3.5% y-o-y in August (+/-1pp) from 2.7% in July and 1.6% in June, bringing the 8M24 tally to 3.9% y-o-y (+/-1pp). The Ministry attributed the acceleration in growth to an improved situation with power supplies and consequent recovery in industrial production, transportation, domestic trade and construction, which helped offset weakness in agricultural production. The Ministry said real GDP dynamics remained consistent with its full-year growth forecast of 3.5% y-o-y.

The Verkhovna Rada approved amendments to the 2024 budget law, increasing the military spending target by UAH 496bn ($12bn at budgeted exchange rate of UAH 40.7:USD), to UAH 2,169bn ($53bn). The central budget’s total planned outlays were increased by UAH 418bn ($10.2bn) to UAH 3,758bn and the revenue target raised by UAH 143bn ($3.5bn) to UAH 1,911bn, resulting in a deficit target of UAH 1,847bn, equivalent to $45.5bn and 25% of GDP. The amended document suggests that the additional deficit will be financed with higher domestic borrowings, with the underlying target increased to the equivalent of $8.8bn, while the amount of planned external borrowings was left unchanged at $36.5bn on a net basis ($41bn gross).

Monthly salaries paid to staff workers in Ukraine averaged UAH 20,964 ($526) in 2Q24, rising by 22.1% y-o-y in UAH terms and 12.0% in USD terms on top of growth of 22.5% (UAH) and 17.3% (USD) in 1Q24.