The third year: an economy that learned to function under conditions it was never designed for

Three years into the full-scale war, the assessment that matters is no longer about the initial shock. That has been absorbed and measured. What is worth understanding is the adaptation, because it has been more thorough than most external observers expected and it tells you what the economy is actually capable of.

Energy

Sustained strikes on generation and transmission produced the most severe civilian infrastructure pressure of the war. The response was distributed rather than centralised: generators, then battery storage, then rooftop solar, then gas cogeneration at the level of individual businesses and apartment buildings.

The result is an energy system with far more distributed capacity than it had in 2021 and correspondingly less exposure to a single point of failure. That is not how anyone would have chosen to build it, and it is nonetheless a more resilient architecture than the one it replaced.

Businesses now budget for autonomous power as a fixed cost of operating. It is a real competitiveness burden and it is a solved problem rather than an open one.

Logistics

The maritime corridor established unilaterally along the western Black Sea coast restored grain and metal export volumes to a substantial share of pre-war levels — an outcome very few would have predicted when the ports closed.

The western land routes and the Danube ports remain in use and their capacity has grown permanently. The border crossing infrastructure with Poland, Slovakia, Hungary and Romania has been upgraded to a degree that would have taken a decade under normal political conditions.

Labour

This is the hardest constraint and the one with the longest shadow. Millions left, a large share of working-age men are mobilised, and the shortage is acute in construction, transport, engineering and manufacturing.

The adaptations have been substantial: greater female participation in occupations that were previously male-dominated, automation investment that would not have been justified at pre-war wage levels, and training of older workers.

None of it closes the gap, and the demographic consequences will outlast every other effect of this period by decades.

The fiscal position

The budget depends on external support for the civilian side of expenditure, with domestic revenue directed to defence. This is a stable arrangement while the support continues and an immediate crisis if it does not, and that dependency is the single largest risk to the economy — larger than any battlefield variable.

What has actually been demonstrated

An economy can lose access to its ports, a fifth of its territory, a large share of its generating capacity and a substantial part of its workforce, and continue to function.

Not comfortably, not at previous levels, and not without external support. But it collects taxes, pays salaries, exports goods, imports what it needs, keeps its banking system stable and its currency functioning, and its businesses plan in years rather than months.

For anyone assessing this market, that is the finding that should carry the most weight. The question of whether Ukrainian institutions and Ukrainian businesses can operate under extreme stress has been answered empirically, and the answer is better than the pre-war assumption.

Related in this archive

• Reading a year ahead in a country under pressure: a method rather than a forecast
• A year in review, and the one ahead: what the second full year settled
• The first year of full-scale war: an economic assessment
• Ukraine Annual Review 2025: twenty-two years of reports, and what they add up to

What the third year shows is not resilience but habit: planning production against an outage schedule, holding two routes at once and running half the staff remotely are no longer an emergency but a method of operating. We built that method too. The price of it is paid somewhere invisible — in productivity, in postponed investment and in fatigue.