European Industry and Construction Recovery

During the war, the EU became Ukraine’s largest trading partner due to lifted trade restrictions and geographical proximity. In the first half of 2024, Ukrainian exports to the EU reached $11 billion, making up 56% of the total. The iron and steel industry relies heavily on this market, with steel product supplies accounting for 84% of Ukraine’s exports in the same period. Therefore, Ukraine’s export prospects depend on the EU market’s performance.

Macroeconomic Situation

The European economy struggles to recover from the 2022 crisis caused by Russia’s aggression. This disruption of supply chains and soaring energy prices led to inflation, rising interest rates, and reduced credit availability. As a result, the eurozone and EU economies grew by only 0.4% in 2023, down from 3.4% in 2022.

Economic activity remains low this year. Eurostat reports that the eurozone economy grew by 0.3% in the second quarter, matching the first quarter’s growth.

The largest economies diverged in the second quarter. Germany’s GDP declined by 0.1% q/q, while France, Italy, and Spain saw growth of 0.3%, 0.2%, and 0.8% q/q, respectively. Steady development in many key countries helped Europe offset the decline in the German economy, resulting in a 0.6% annual growth for the eurozone in the second quarter.