The National Bank of Ukraine reported businesses improved their economic expectations in August, with the business activity expectations index rising to 49.0 from 48.3 in July.

The index, based on monthly surveys of real-sector companies about their expected performance, uses 50 as the neutral threshold, meaning Ukrainian businesses remain slightly pessimistic but are moving toward stability.

Domestic resilience emerges

Construction companies led the optimism, with their index hitting 54.0 in August. They have stayed positive for four consecutive months as reconstruction projects and sustained domestic demand provide steady work.

Trading firms have maintained optimism for six months as new harvest supplies reach markets and consumer spending holds up.

Service companies remained the most cautious at 47.0, citing expensive logistics, higher electricity prices, and skilled worker shortages.

The drivers behind this cautious improvement include energy stability, decelerating inflation, and what the NBU calls “brisk consumer sentiment”—suggesting Ukrainian purchasing power hasn’t collapsed despite the war.

The aid lifeline making it possible

But this domestic resilience exists only because foreign partners keep Ukraine’s external accounts afloat. Balance of payments data released alongside the business survey reveals the underlying dependency.

The current account deficit nearly doubled to $4.1 billion in July compared to last year, as imports surged 19.9% while exports managed only 3.1% growth.

Foreign direct investment collapsed from $3.2 billion to just $1.1 billion in the first seven months of 2025. Instead, governments and international organizations provide the lifeline: $17.8 billion in net financial flows this year compared to just $7.3 billion last year.

Ukraine’s $43 billion reserves look healthy, but exist because donors keep filling the tank. Without this support, the domestic confidence businesses report would evaporate quickly.

Strategic implications

This combination reveals both the success and the limits of Western aid strategy. The money works—Ukraine’s economy functions and companies plan for the future rather than just surviving day-to-day. Businesses can focus on reconstruction and meeting consumer demand because external support handles the macroeconomic gaps.

But the deepening dependency raises sustainability questions.

For now, the arrangement holds: international support enables domestic stability, which maintains business confidence, which keeps the economy functioning.

Whether this virtuous cycle continues depends on factors far beyond Ukraine’s borders—donor fatigue, military developments, and shifting political priorities in supporting countries.

The cautious optimism Ukrainian businesses report may prove justified, but only if external support continues at unprecedented levels.