Achieving financial stability under uncertainty: policy priorities for Ukraine

Abstract

Introduction. Russia’s full-scale war against Ukraine, destruction of productive and energy infrastructure, exceptionally high defense requirements, a structural external trade deficit, and the dependence of public finances on international support have created an unusual configuration of macro-financial risks. Under these conditions, defining financial stability solely as price stability or banking-sector resilience is insufficient. Problem Statement. According to the analytical presentation used in the study, real GDP growth in January–July 2026 was estimated at only 0.1% year on year, while consumer inflation reached 7.7% in July and the merchandise trade deficit amounted to USD 34.6 billion. At the same time, international reserves reached USD 51.2 billion and the banking system remained resilient. This asymmetry requires a shift from managing individual indicators towards an integrated resilience framework. The purpose is to develop a coordinated set of fiscal, monetary, foreign-exchange, macroprudential and investment-credit instruments for maintaining Ukraine’s financial stability under exceptionally high uncertainty. Methods. The research applies systemic, comparative and structural-functional analysis, scenario-based assessment, macro-financial imbalance analysis, comparison of author estimates with data from the National Bank of Ukraine, Ministry of Finance of Ukraine, IMF and World Bank, and synthesis of international policy experience. Results. Financial stability is shown to depend primarily on the interaction of five vulnerabilities: a weakened productive base, insufficient private investment, a large fiscal financing gap, a structural external imbalance, and limited transformation of domestic savings into productive investment. A “financial resilience corridor” is proposed to jointly monitor fiscal, inflation, foreign-exchange, banking and investment risks. Conclusions. Transitioning from a model strongly dependent on government demand and international transfers toward an investment-led model requires neither mechanical monetary easing nor abrupt fiscal consolidation. It requires better risk allocation through guarantees, war-risk insurance, deeper capital markets, stronger market-based bank lending, export capacity, private investment and domestic production.