'Surgical precision'. Ukraine's payment balance shows near-zero deficit in 2024

Ukraine's consolidated payment balance for 2024 was nearly zero, with a deficit of only $3 million, compared to a surplus of $9.5 billion in 2023, the National Bank of Ukraine reported on its website.

The consolidated payment balance consists of three main components: the current account (trade in goods and services, transfers), capital transactions, and the financial account (investments).

In Ukraine's case for 2024, the current account deficit was $13.42 billion. However, this was offset by a net inflow in the financial account ($13.17 billion) and capital transactions ($0.25 billion), resulting in an almost zero balance for the consolidated payment balance.

The data is preliminary and does not include temporarily occupied territories, such as Crimea and Sevastopol.

A significant current account deficit indicates that Ukraine spends much more on imports of goods and services than it earns from exports. The country relies on external financing to cover this gap and requires an inflow of foreign capital through loans, investments, or financial aid.

Commenting on the NBU data, the head of the Verkhovna Rada's Finance Committee, Danil Getmantsev, noted that the payment balance was managed with "surgical precision."

"Given how the past year unfolded, with eight out of the first ten months showing a deficit in the payment balance, this is not a bad result. It reflects the irregularity of international aid last year, most of which arrived in March, August, and November-December," Getmantsev wrote on Telegram.

The increase in the current account deficit is a key risk for Ukraine, he added. According to IMF estimates, a current account deficit exceeding 5% of GDP (Ukraine's was 7% in 2024) is unsustainable in the long term and poses risks to macro-financial stability.

"Minimizing these risks during the war and post-war reconstruction primarily involves maintaining significant and regular volumes of international aid, expanding export potential and logistics, and significantly increasing the attraction of direct foreign investments," Getmantsev stated.

Last week, the National Bank warned that the state budget for 2025 may need to be revised, which could lead to tax increases.