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On the War

In a surprising turn of events to most, on the 6th of August, Ukraine conducted a swift incursion into Kursk oblast, Russia, neighboring Ukrainian Sumy oblast, which has been severely affected by continuous Russian bombing attacks since the beginning of the war. According to several sources, Ukraine has gained more territory in Kursk in 3 days, than Russia did in 3 months of operations around Kharkiv. The incursion is still ongoing.

Economy - growth and inflation

Despite several negative factors, Ukraine experienced a 4.1% GDP growth within its first six months of 2024, corresponding to forecasts of continued economic recovery and following a GDP growth of 5.3% in 2023. According to the Ministry of Economy of Ukraine, the key factor hindering further growth was power outages due to its shortage. Among the factors that contributed to growth were high export rates of products of the mining and metallurgical complex and the early start of harvesting winter crops.

NUCC on bilateral trade

Our bilateral trade with Ukraine is still going strong. Although a 10% decrease this year, it must be compared to a 70% increase last year – indicating continued strong activity in the trade of goods. Norwegian enterprises are still operating in Ukraine, and in a 10-year perspective, our bilateral trade has had a fivefold increase from 1.5 b NOK in 2015 to 7.2 b NOK today in goods and services. Norway continues to buy from Ukraine, and imports are up 46% first half year, mainly due to agricultural products.

New mobilization law put into force

The new Law on Mobilization came into force on 18 May. Among the main amendments are:  

- The age of mobilization has been reduced from 27 to 25. - Ukrainian men in the age group from 18 to 60 who live abroad must register for military service.

- Cancellation of the category of “limitedly fit” persons (effective from 4 May 2024) Also, from the middle of July, the management of critical enterprises can reserve their employees from the mobilization through the Diia portal. This makes the process more transparent and faster.  

Stabilization of the Energy Sector

According to Ukrenergo for the last few weeks, the situation with electricity has been stabilized. There are a few reasons for that; Firstly, the import of electricity increased considerably while the export of electricity has stopped. Secondly, Energoatom put a reactor back into service after undergoing planned and preventive maintenance, adding 1,000 MW of power to the system. Energoatom also noted that this reactor is already the third one on where planned and preventive maintenance has been completed.  

Norad: New enterprise support scheme for Ukraine

Norad has opened up with calls for proposals under the grant scheme for Ukraine and neighboring countries (The Nansen Support Programme), to foster investment-ready projects that could underpin economic activity in Ukraine and reduce financial risks. Consideration will be given, but not limited to, such sectors as:

- Energy: Focus on sustainable energy production and the transition towards it.  

- Food security, agriculture, and food production: Efficiency and modernization of agriculture and food production.  

- Infrastructure: Businesses related to the production of input factors required for the reconstruction of Ukraine such as critical infrastructure, school buildings, hospitals, etc.  

Ukraine: A worthwhile investment  

The Ukrainian economy is very much dependent on external support and a lot of this support comes not as grants but as loans, possibly challenging future economic growth unless debt relief is considered. This, together with foreign investments and know-how will help the Ukrainian economy recover and establish itself as a strong trading partner, beneficial to the EU, the same way Europe became a beneficial trading partner to the US after World War Two.

For a detailed overview, please read the full report here.