Japan is prepared to provide $4.5bn in support for Ukraine, including loan guarantees to the World Bank and $1.0bn for humanitarian aid and reconstruction, Japanese Prime Minister Fumio Kishida said during an online summit of G7 leaders. Ukrainian President Volodymyr Zelensky praised the decision, saying the first tranche of Japanese aid of $1.5bn was expected in January and the remaining $3bn during the spring. On a related note, the head of Ukrainian parliament’s budget committee Roksolana Pidlasa said that budget spending this year would be fully financed. Commenting on external support in 2024, she projected $16bn from the EU, part of the EUR 50bn 4-year Ukraine Facility program (vs. EUR 18bn expected for 2024 before); $8.5bn from the US; $4.5bn from Japan; $1.9bn from Canada; $1.5bn from the UK in the form of loan guarantees; and $5.4bn from the IMF.

State rail monopoly Ukrainian Railways (RAILUA) reported freight transportation of 14.1 Mt in November, up 4.1% m-o-m and 33% y-o-y.

NBU gross foreign reserves inched down by 0.5% ($0.2bn) m-o-m in November, to $38.8bn, remaining up 36% or $10bn YTD. The end-November tally was equivalent to 5.2 months of prospective goods and services imports, according to a central bank estimate.

Ukraine exported 4.5 Mt of grain and oilseeds in November, the fifth month of the marketing year (MY) 2023/24 (July 2023 – June 2024), up 34% m-o-m but down 11% y‑o‑y. Grain exports totaled 3.6 Mt (+46% m-o-m, -7% y-o-y) and oilseed exports stood at 0.9 Mt (-1% m-o-m, -24% y-o-y).

According to Infrastructure Minister Oleksandr Kubrakov, Ukraine has exported over 7 Mt of commodities via its Black Sea corridor since opening it in August, including up to 5 Mt of agricultural produce and 2 Mt of other commodities. Over this period, 226 ships called at Ukrainian Black Sea ports and 200 exited Ukrainian waters. Over 30 ships are currently being loaded and about the same number are either on the way to Ukraine or departing.

The Ministry of Finance placed UAH 8.6bn ($237m) of hryvnia-denominated bonds and $100m of USD paper at a primary auction yesterday.

DTEK Group announced the signature of a memorandum of understanding with Danish wind turbine producers Vestas to expand its Tyligul wind power plant by adding 64 wind turbines with a combined capacity of 384 MW (6 MW each), prospectively bringing the plant’s total capacity to 498 MW. Construction is expected to start in 2Q24 and should be finalized at the end of 2025. Total CAPEX of the second phase is estimated at EUR 450m.

According to preliminary data from the NBU, state-owned Ukreximbank booked 3Q23 net profit of UAH 1.6bn ($44m), up 93% q-o-q, bringing 9M23 net income to UAH 3.6bn ($98m), up from a UAH 7.9bn ($255m) net loss in 9M22. Total assets (in UAH terms) fell by 6.0% q-o-q (+13% y-o-y), with net loans down 1.2% q-o-q (-11% y-o-y). Customer deposits (also in UAH terms) dropped by 8.2% q-o-q (+31% y-o-y). NIM, based on net interest-bearing assets and in UAH terms, rose by 0.7pp q-o-q to 3.2% (2.3% in 9M23, -0.7pp y-o-y). Annualized cost of risk was positive at 2.0% due to a release of provisions last quarter, on top of positive cost of risk of 1.5% in 2Q23 (pos. 2.2% in 9M23 vs. 19% provisioning in 9M22). The bank reported a capital adequacy ratio of 10.1% (+2.2pp q-o-q and -1.5pp y-o-y).

The Ukrainian economy has performed better than expected in recent months, supported by rebounding seaborne exports and stable power supplies, as Russia has thus far stopped short of launching mass attacks against domestic energy infrastructure. Expecting the economic impact of the border blockade by Polish carriers to be limited and factoring in a stronger than expected agricultural harvest, we upgrade our 2023 real GDP growth estimate by 0.7pp to 5.2% y-o-y.

The central budget provisionally ran a deficit of UAH 152bn ($4.2bn) in November, up from a revised UAH 100bn in October (with grants being counted toward revenue).

Ukraine’s headline current account (C/A) deficit widened to $0.9bn in October from a revised $0.7bn in September, bringing the 10M23 gap to $6.3bn, down from a surplus of $7.3bn in 10M22. The financial account (F/A) surplus (including IMF financing) was flat m-o-m at $0.1bn, keeping the 10M23 surplus at $16.6bn, up from a deficit of $12.4bn in 10M23.

The National Bank’s PMI-type index of business expectations inched down by 0.5 points m-o-m in November following a similar decline in October, sinking to 49.1 on a 0-100 scale and remaining below the neutral level of 50.

The past week brought new marginal gains for Russian forces along the eastern front, mostly around Donetsk and Bakhmut. Russian troops also stepped up offensives around Kupyansk in the Kharkiv region, the northernmost section of the front adjacent to Russia. The southern front was reportedly less active and largely static. Based on independent OSINT mapping sources, Russian forces captured under 20 km2 of territory for the whole of November, meaning the front lines barely changed for another month. However, despite minimal moves on the ground and heavy losses suffered by Russian forces, their offensive pressure is not easing and seems to have increased and expanded geographically last week.

The NBU lifted its restrictions on sales of F/X cash by banks and non-bank outlets to households and eased several other of its F/X controls. In particular, the NBU allowed Ukraine’s Export Credit Agency (ECA) to transfer funds abroad for reimbursements under insurance and reinsurance contracts concluded with foreign insurers or reinsurers. Also, the Bank added to its list of permitted cross-border transfers for individuals payments for medical treatment and studies abroad. All changes take effect today.

At least 115 ships with a combined deadweight of 4.9 Mt called at Ukrainian Black Sea ports in November and 95 ships with 4.3 Mt in total deadweight tonnage left Ukraine last month, up from 50 ships with a combined deadweight of 2.2 Mt in October.

The price of electricity on Ukraine’s day-ahead market rose by 7.5% m-o-m and 22% y-o-y in November, to a new record high of UAH 4,041 (EUR 100)/MWh.