Canadian Prime Minister Mark Carney announced CAD 2bn ($1.5bn) in new military aid for Ukraine during his meeting with President Volodymyr Zelensky at the G7 summit. The Ukrainian presidential office said the package would include drones, helicopters and ammunition as well as fund Ukraine’s domestic defense industry.

Capital investment in Ukraine rose by 32% y-o-y in nominal terms in 1Q25, reaching UAH 124bn or $3.0bn, following a 35% rise in 2024.

According to the minutes of the latest meeting of the NBU’s 11-member Monetary Policy Committee (MPC), which preceded the central bank’s Jun. 5 rate decision, all members supported keeping the key policy rate unchanged at 15.5% for a second consecutive month, in line with the Bank’s forward guidance. MPC members agreed that certain pro-inflationary risks — particularly those stemming from adverse weather conditions — had materialized recently, causing headline inflation to exceed the NBU’s projected trajectory in April and May. Several members also noted that the recent appreciation of the euro against the USD (and, by extension, the hryvnia) had contributed to additional inflationary pressures. Nevertheless, the committee viewed the inflation spike as transitory and maintained expectations that inflation would begin trending downward from June, supported by a high base in administratively regulated tariffs, subdued fundamental pressures, and stable inflation expectations.

The stock of gross hryvnia-denominated loans issued by Ukrainian banks rose 2.7% m-o-m to UAH 918bn in May, accelerating from +1.5% in April and bringing the YTD growth rate to +11% (vs. +14% in 2024). F/X-denominated loans shrank 1.2% m-o-m to $6.2bn, reversing April’s 2.8% m-o-m gain but remaining marginally up YTD (+1.2%).

Key highlights: Russian forces slowed their advance in Sumy region but made new gains in Donetsk. President Zelensky said Russia’s latest mass missile and drone strike on Jun. 15 targeted energy infrastructure, violating the energy ceasefire.

The unfolding air and missile between Israel and Iran carries military, political and economic implications for Ukraine, which we assess below.

Ukraine’s Gas Transmission System Operator (GTSOU) and Poland’s GAZ-SYSTEM have agreed on a technical solution to temporarily increase firm capacity at the Polish exit point toward Ukraine by 92% to the equivalent of 12.4 million cubic meters (mcm) per day or 4.5 bcm annualized. The additional capacity will be offered on a monthly basis starting with an auction today, while daily capacities will become available from Jul. 1.

The EBRD has sent letters to the Ukrainian ministries of energy and finance, expressing concern about recent amendments to Ukrenergo’s charter. The changes raised the quorum required to appoint or dismiss executive board members, including the CEO, to five from four. The amendment came amid the ongoing CEO selection process, with three candidates reportedly shortlisted.

German Defense Minister Boris Pistorius, visiting Kyiv yesterday, said Germany was preparing an additional EUR 1.9bn ($2.2bn) in 2025 military aid for Ukraine on top of the previously approved EUR 7bn. President Volodymyr Zelensky said part of the prospective package, to be approved by the German parliament, would finance joint development and production of long-range weapons including drones and missiles.

Ukraine’s Economy Ministry estimated real GDP growth at 1.1% y-o-y in April (±0.5pp), up from 0.5% in March, bringing the 4M25 tally to +0.9% vs. +0.8% y-o-y in 1Q25. Key contributors to growth included the processing industry—driven by military and reconstruction-related output—alongside domestic trade and stable power supplies. In contrast, the transportation, mining, and agriculture sectors were the main drags. The ministry noted that recent GDP dynamics remain in line with the government’s full-year growth forecast of 2.7% y-o-y.

The volume of natural gas in Ukraine’s storage reservoirs totaled 6.7 bcm as of end-May, up 20% m-o-m but down 27% y-o-y. Gross inflows from abroad stood at 0.5 bcm last month, surging by 87% from April and bringing 5M25 imports to 1.7 bcm (+3.4x y-o-y). Exports of previously stored gas totaled a minor 21 million cubic meters (mcm; -70% m-o-m), reaching 0.3 bcm in 5M25 (-80% y-o-y).

Ukraine exported 3.2 Mt of grain and oilseeds in May, up 13% m-o-m but down 44% y‑o‑y. Grain exports totaled 2.9 Mt, up 20% m-o-m but down 48% y-o-y, while oilseed exports stood at 0.3 Mt, down 28% m-o-m but up 47% y-o-y.

Military aid for Ukraine approved by the previous US administration is continuing to be delivered and there is also an active dialogue with Washington regarding the purchase of American weapons, a Ukrainian Foreign Ministry spokesperson said. He added, without elaborating, that various mechanisms and funding sources are being discussed, including in the framework of the US-Ukraine Reconstruction Investment Fund established under a bilateral minerals deal. A US State Department spokesperson confirmed at a press briefing yesterday that “a number of different negotiations” concerning purchasing US weapons, including air defense, were ongoing.

Ukraine’s headline CPI rose by 1.3% m-o-m in May, accelerating from 0.7% in April and pushing the y-o-y tally to 15.9% from 15.1% a month earlier. Core inflation, which excludes administratively regulated tariffs and prices of raw foods and energy, was up 0.5% m-o-m, in line with April, bringing the y-o-y growth tally to 12.3% from 12.1%.

Monthly salaries paid to staff workers in Ukraine averaged UAH 23,460 in 1Q25, rising by 24% y-o-y on top of +23% y-o-y in 2024. In USD terms, the average nominal salary increased by 12% y-o-y to $553, in line with last year’s expansion.

Daily crude steel production in Ukraine fell 11% m-o-m to 20.5 kt in May following a 30% surge in April. Monthly output totaled 636 kt (-8.1% m-o-m, -14% y-o-y), bringing 5M25 production to 3.1 Mt (-2.5% y-o-y). Finished and semi-finished steel output totaled 525 kt in May (-4.0% m-o-m, -12% y-o-y) and 2.5 Mt in 5M25 (-2.4% y-o-y). Hot metal production stood at 645 kt last month (-2.3% m-o-m, -1.3% y-o-y) and 3.0 Mt in January-May (+5.9% y-o-y).