In May of this year, Ukraine’s current account deficit (CAD) reached $3.5 billion, marking the highest monthly figure since the onset of the full-scale aggression by the Russian Federation. For comparison, the total for the entire year of 2021 was $3.9 billion.
This is reported by Finway
Significant Increase in Imports and Decrease in External Inflows
The primary reason for the increase in the deficit was a substantial deterioration in the trade balance. In May, imports of goods rose by 20.6% year-on-year, while exports increased by only 1.4%. As a result, the deficit in foreign trade of goods reached $3.6 billion, which is 47% higher than in May of last year.
Additionally, the situation was complicated by a decline in private remittances from abroad by $0.7 billion, as well as a reduction in the surplus of secondary income (non-repayable aid) to $0.7 billion. This is 29.2% less than a year ago and is the lowest level since the start of the war.
CAD: Dynamics and Forecasts
In the first five months of 2025, the total current account deficit reached $11.8 billion, which is twice as high as the result for the same period in 2024 and nearly seven times higher than in 2023. This trend indicates the presence of deep structural problems in the Ukrainian economy. According to the updated forecast from the International Monetary Fund, the CAD may reach $34.6 billion in 2025, or 16.5% of the expected GDP. For comparison: in 2024, this figure was 8.3%, and in 2023 it was 5.4%.
“The CAD is manageable when it is covered by inflows of foreign direct investment (FDI), the positive effects of which primarily balance the trade balance, which we expect to reach a deficit of $46 billion this year. However, in May, the total inflow of FDI was absent. Since the beginning of the year, only $0.8 billion in FDI has come to Ukraine – 3.4 times less than in the same period last year.”
At the same time, in May, Ukraine did not record any inflow of foreign direct investment. In the first five months of 2025, this figure was only $0.8 billion, which is 3.4 times less than in the corresponding period of the previous year.
Experts emphasize that the reduction in new investments, especially in “greenfield” projects, exacerbates the economic vulnerability of the country and complicates the stabilization of the balance of payments. In these conditions, overcoming the CAD remains one of the main challenges for Ukraine’s macroeconomic stability.