Ukraine’s merchandise trade deficit provisionally stood at $3.5bn in March, widening sharply from a monthly average of $2.5bn in January-February. Imports jumped by 24% m-o-m and 21% y-o-y to $7.2bn, fully offsetting 18% growth in exports, to $3.7bn (+13% y-o-y). In 1Q25, the merchandise trade gap increased to $8.5bn from $5.9bn in 1Q24 as imports rose 16% y-o-y to $18.5bn while exports were flat at $10bn.

Ukraine exported 8.5 Mt of iron ore in 1Q25, down 5.7% y-o-y. This implies a recovery in March, with volumes up 18% m-o-m to 2.9 Mt (still -13% y-o-y) following a 21% m-o-m slump in February. In value terms, 1Q25 iron ore exports reached $0.7bn (+20% y-o-y), with March volumes up 18% m-o-m to $238m (-23% y-o-y). Steel exports remained under pressure, totaling 0.9 Mt in 1Q25 (-12% y-o-y). March volumes fell 6.6% m-o-m to 300 kt (-1.6% y-o-y), following a 12% increase in February. Export values stood at $0.5bn in 1Q25 (-17% y-o-y), implying a 2.8% m-o-m decline in March to $167m (-10% y-o-y).

Ukraine’s headline CPI rose by 1.5% m-o-m in March, accelerating from 0.8% in February and pushing the y-o-y tally to 14.6% from 13.4% a month earlier. Core inflation, which excludes administratively regulated tariffs and prices of raw foods and energy, increased by 1.4% m-o-m, up from 0.7% in February and bringing the y-o-y rate to 12.4% from 12.0%.

Ukraine has received EUR 1.0bn of aid from the EU, the third tranche of the bloc’s EUR 18.1bn special macro-financial assistance (MFA) program that comprises its contribution to the G7-led $50bn Extraordinary Revenue Acceleration (ERA) initiative backed by proceeds from immobilized Russian sovereign assets held in the EU. Similar to the EU’s previous ERA disbursements of EUR 3.0bn in January and EUR 1.0bn in March, the latest tranche has a maturity of up to 45 years and will go towards reimbursing critical budget expenditures, both social and military, as well as finance reconstruction. The European Commission (EC) reiterated its readiness to front-load the remaining part of its ERA funds in line with Ukraine’s needs.

Naftogaz acting CEO Roman Chumak said the company has restored around half of its facilities that were damaged by Russian drone and missile attacks in February and early March.

The Ministry of Finance placed UAH 7.5bn ($203m) of hryvnia-denominated bonds at a primary auction yesterday, in line with a UAH 7.0bn ($169m) sale a week earlier.

Belgium announced yesterday EUR 1bn ($1.1bn) in military support for Ukraine in 2025, joining other European countries which unveiled sizable assistance packages earlier this year. In particular, military aid announcements for Ukraine in recent weeks have included $8bn from Norway, EUR 2bn ($2.2bn) from the Netherlands, $1.6bn from Sweden, and EUR 1bn ($1.1bn) from Denmark.

Vodafone Ukraine (VFU), the country’s second-largest mobile operator, held a conference call to discuss its 2024 results published on Apr. 4. The company expects its 2025 EBITDA margin at around 50%, as a higher ARPU driven by recent tariff increases will be offset by rising electricity and labor costs.

NBU gross foreign reserves rose by 5.6% m-o-m (+$2.2bn) to $42.4bn in March, being equivalent to 5.2 months of prospective goods and services imports, the central bank said. The official exchange rate of the hryvnia to the US dollar was unchanged m-o-m at UAH 41.5:USD, up 1.4% YTD but down 5.4% y-o-y.

Ferrexpo reported 1Q24 pellet production of 1.3 Mt, down 10% q-o-q and 26% y-o-y, including 1.1 Mt of premium 65% pellets, 161 kt of pellets made from third-party ore, and 82 kt of DRI pellets. Quarterly concentrate production tripled q-o-q to 778 kt (+223% y-o-y). Total production thus came in at 2.1 Mt, up 20% q-o-q and 3.5% y-o-y.

Key highlights from last week: Russian forces captured around 40 km2 last week and 160 km2 in March, their smallest territorial gain since June 2024, despite maintaining a high intensity of assaults. Heavy fighting continues along the border in Russia’s Kursk and Belgorod regions, where Ukrainian forces maintain small bridgeheads. Russia conducted new missile and drone strikes against Kyiv and other large cities while claiming its compliance with a US-mediated energy ceasefire. Dragon view: The intensity of Russian ground assaults on the front line remains close to peaks observed in late 2024, yet Russian territorial gains have slowed notably so far this year. Last week, Russian forces captured around 40 km2 along the 1,000+ km2 front line, in line with their weekly gains in February-March and much lower than the 100-200 km2 Russian forces captured per week in November-December last year. Pokrovsk remains the epicenter of Russian offensives, this sector accounting for over 40% of all Russian assaults inside Ukraine last week. Lyman sector in the northern part of Donetsk region, which borders Kharkiv and Luhansk regions, became the second most active fighting zone last week (and #1 in terms of Russia’s territorial gains), pointing to Russia’s intensifying offensive effort in this area. Russia’s ultimate goal in the Lyman sector is to break through towards Slovyansk and Kramatorsk, which together with Pokrovsk are the major strongholds in the Ukrainian-controlled part of Donetsk region. Heavy fighting also continued along the border in Russia’s Kursk and Belgorod regions, where Ukrainian forces maintain small bridgeheads (this sector ranked third by number of Russian attacks last week).

US Secretary of State Marco Rubio said on Friday that if Russia continues dragging out talks on a ceasefire in Ukraine the US administration is “not going to fall into the trap of endless negotiations about negotiations.” He added that “we will know soon enough, in a matter of weeks, not months, whether Russia is serious about peace or not.”

Vodafone Ukraine (VFU), Ukraine’s second largest mobile operator, reported 2024 revenue of $609m (+3.0% y-o-y), EBITDA of $304m (-12%), and net income of $88m (-36%), for EBITDA and net margins of 50.0% (-8.7pp y-o-y) and 14.5% (-9.0pp). VFU booked a 2024 ARPU of UAH 118.4 or $2.95, up 10% y-o-y in UAH and up 0.6% y-o-y in USD terms. Its customer base shrank by 0.6% y-o-y to 15.8 million subscribers.

The IFC Board on Apr. 1 approved an $80m loan package for Astarta Holding, Ukraine’s largest sugar producer, to finance the construction of a soybean protein concentrate plant in Poltava region. The package includes a direct loan of up to $50.7m from IFC, a loan of up to $24.4m under the Economic Resilience Program for Ukraine (ERA) supported by the Netherlands, and a loan of up to $40m from participating lenders, with the total loan amount not exceeding $80m. Other lending parameters were not disclosed.

According to provisional data from the Finance Ministry, the central budget ran a cash-based deficit of a mere UAH 8bn in March, down from UAH 159bn ($3.8bn) in February and bringing the 1Q25 cash gap to UAH 237bn, or $5.7bn in USD terms vs. $5.2bn in 1Q24.

Ukraine exported 4.0 Mt of grain and oilseeds in March, up 5.0% m-o-m but down 28% y‑o‑y. Grain exports totaled 3.6 Mt, up 5.1% m-o-m but down 31% y-o-y, while oilseed exports stood at 0.5 Mt, up 3.7% m-o-m and down 0.6% y-o-y.