The advantage is on Ukraine’s side: What is happening with the economies of the warring countries?

The Economist notes that the Ukrainian economy looks “healthier” than the Russian economy did after the start of the full-scale war. Ukraine’s economy has been rebuilt to navigate the realities of wartime. However, it is still 25% smaller than in 2021. Meanwhile, the NBU forecasts GDP growth of 4% in 2024 and 4.3% in 2025. The currency is stable, and the discount rate of 13.5% is close to a 30-month low.

However, state spending is greater than revenue. Almost the entire Ukrainian budget deficit of about 20% of GDP in 2025 will be covered by external sources.

“Ukraine will probably be able to survive without American aid in 2025. However, if America leaves, Ukraine may be in a difficult situation in 2026,” analysts suggest.

In contrast, Russia’s discount rate is as high as 21%, banks look “fragile,” and GDP is expected to grow by only 0.5–1.5% in 2025. However, instead of blaming the war on a hostile business environment, the Russian business elite are expressing discontent with the Russian Central Bank.