Ukrainian economist warns economy has lost resilience as GDP turns negative
Economist Oleksiy Kush has published an analysis arguing that Ukraine's economy is no longer equipped to absorb new shocks and has entered a downturn. Kush points to negative GDP dynamics in early 2026, declining industrial output, damage to port and transport infrastructure, and tight monetary policy by the National Bank of Ukraine, and criticizes the 2027 draft budget for minimal allocations to the strategic reserve and mobilization measures.
Key points
- Economist Oleksiy Kush published an article titled 'Ukraine is not ready for a new crisis, and it is already here.'
- GDP dynamics turned negative in early 2026 for the first time since Q1 2023.
- Industrial production fell 0.3% in the first seven months of 2026 year-on-year.
- The 2027 draft budget allocates 69 million UAH (about 1.5 million USD) to the strategic reserve and 144 million UAH to mobilization measures in the economy.
- Kush attributes the lack of internal credit resources to tight policy by the National Bank of Ukraine, which he says created favorable conditions for a banking lobby.
- Summer 2026 strikes on industrial, warehouse, postal, and transport infrastructure disrupted supply chains, and restrictions on Black Sea ports narrowed export opportunities.
- Kush describes the crisis as an unfulfilled 'homework assignment' of governments led by Denys Shmyhal and Yulia Svyrydenko.
Why it matters
The assessment signals that the Ukrainian economy is entering a new crisis phase in the fifth year of the war, with negative GDP dynamics returning for the first time since early 2023. It highlights an internal policy debate over the National Bank's tight monetary stance and its effect on domestic credit for industry, and points to budget choices — minimal allocations to the strategic reserve and to mobilization measures in the 2027 draft — as evidence of inadequate crisis preparedness. The analysis also ties economic deterioration directly to Russian strikes on industrial, transport, and port infrastructure, underlining the link between the battlefield and economic conditions.
What happened
Economist and financial analyst Oleksiy Kush published an article titled 'Ukraine is not ready for a new crisis, and it is already here,' arguing that the Ukrainian economy has not made the transition to structural restructuring and resilience against wartime shocks. According to Kush, GDP dynamics turned negative in early 2026 for the first time since the first quarter of 2023, after the economy had grown at rates of 2–3% in 2024–2025 following its 2023 rebound. Industrial production fell 0.3% in the first seven months of 2026 compared with the same period a year earlier, and the industrial sector is experiencing its deepest contraction amid rising imports. In summer 2026, Russian strikes on industrial, warehouse, postal, and transport infrastructure disrupted supply chains, while restrictions on Black Sea ports narrowed export opportunities for an indefinite period. Kush blames the lack of internal credit on what he describes as the excessively tight policy of the National Bank of Ukraine, which he says created greenhouse conditions for a banking lobby group. He also criticizes the draft 2027 state budget for allocating only 69 million UAH (about 1.5 million USD) to replenish the strategic reserve and only 144 million UAH to mobilization measures in the economy in the fifth year of the war.
How Ukrainian sources describe it
ZN.UA and Ukrinform frame the downturn as a homegrown policy failure as much as a consequence of war. The coverage blames the National Bank of Ukraine's tight monetary policy for starving industry of credit, and criticizes the draft 2027 budget for setting aside only 69 million UAH for the strategic reserve and 144 million UAH for mobilization measures. The piece centers an individual Ukrainian economist, Oleksiy Kush, and assigns responsibility for past inaction to named Ukrainian government leaders — Denys Shmyhal and his successor Yulia Svyrydenko — by describing the current crisis as an unfulfilled 'homework assignment' of their cabinets.
Background
Ukraine's economy rebounded in 2023 after the initial shock of the full-scale Russian invasion and grew at 2–3% during 2024–2025. Industry has historically been a backbone of Ukrainian exports and employment, and Black Sea ports have served as a key channel for Ukrainian agricultural and other exports to foreign markets. The 2027 draft budget was prepared by the government of Yulia Svyrydenko, which succeeded the cabinet led by Denys Shmyhal.