WOOD Flash – Ukraine macro: notes on the economy and the reconstruction process

In this flash note, we pull together what we have learned from our conversation with the NBU’s Vice Governor Nikolaychuk and his team, the NBU’s ninth research conference, and the Ukraine Recovery Conference held in Rome last week. In our view, the institutional mechanism for the reconstruction of Ukraine is beginning to reach critical mass, even though peace remains elusive. Full entry to the EU is a long path and, at the moment, Hungary is blocking the beginning of the negotiations for the first chapter of the acquis communautaire. We do not believe that Hungary will choose to block the process indefinitely, as the history of EU accession shows earlier cases of these kinds of tactics. The Ukraine economy revealed a modest expansion in 1Q, and the economic indicators are, on the margin, constructive for the coming quarters.