Time to return what belongs to us
The commander in chief of the Ukrainian Armed Forces, General Valerii Zaluzhnyi, has shared a video on his social media accounts announcing that it’s time to reclaim what belongs to us. His message succinctly captures the essence of the current situation in Ukrainian society, both on the frontline and around the country. The relentless efforts of every Ukrainian are driven by an inner spring of energy seeking expression. The upcoming weeks will witness the decisive battle, with a clear goal and an unwavering determination to achieve victory. There is a strong belief that the Russians will be driven out of the South, although the cost of this victory remains a major concern for everyone.
We have limited information about the situation at the frontline; currently we receive news first from Russian military bloggers or the international media, before hearing comments from the general staff. However, based on the available fragments of information, a clear picture emerges that the preparatory stage of the counteroffensive is well underway. Ukrainian forces are strategically engaging with the expectations of the Russians, delivering disruptive strikes at various sections of the front, and even within Russian territory, to test reactions and provoke mistakes. All indications suggest that the main counteroffensive will likely take place within coming weeks.
The economy is showing signs of improvement, with consumer inflation slowing to 17.9% y/y in April, and the NBU revising down its 2023 y/y inflation forecast to 14.8%. The hryvnia continues strengthening, supported by a prudent monetary policy and consistent financial assistance. The Central Bank has started discussing potential easing measures for Q4 2023, reflecting improving internal conditions. Although agro-production is expected to decrease by around 15% in 2023, there is still an ample stock of crops from 2022, and food exports are projected to remain robust, barring transportation disruptions. Fiscal accounts have a certain level of predictability, with $42 billion in committed support from Western partners, including a relatively moderate IMF program. Gross international reserves are expanding significantly, and reached $35.9 billion (equivalent to 4.7 months of future imports) by the end of April.
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