Ukraine Country Risk Rating

Ukraine’s overall risk remains high mainly due to the ongoing war, with a very high risk rating for political violence. On the war front, Ukraine is having success hitting medium- to long-range targets in Russia, but a lack of U.S. anti-missile defence is seeing more damage in Ukraine. On the battlefield the deadlock is expected to continue into the autumn and winter. Meanwhile, a comprehensive peace settlement acceptable to all sides remains unlikely in 2026 as Russia maintains its initial hard-line demands, Washington's primary focus has shifted toward the war in Iran and Ukraine would have to make territorial concessions and abandon its NATO ambitions. However, with deadlock on the battlefield, plus the risk of a less friendly U.S. president in 2029, Putin could soften the negotiating stance in 2027. Meanwhile, domestic political pressure to hold wartime elections has been voiced by Ukraine’s ex-defence minister. Additionally, Volodymyr Zelenskyy has come under pressure over a number of corruption allegations against top allies. Despite the political opposition remains broadly aligned on the war effort, political interference remains at medium-high level. Logistical and manufacturing problems linked with supply chain disruptions continue to restrain economic activity, which has caused the risk of doing business to remain at a medium-level. The IMF forecast inflation at 6.1% in 2026, but remaining elevated in 2027 at 7.7%. Though the economy contracted by 0.5% y/y in Q1, the IMF still projects reasonable growth for 2026 of 2.0% due to the war and support from European funding. Finally, because of surging public debt, the government’s capacity to implement economic stimulus remains heavily restricted.