Economic Dynamics of the Khmelnytskyi Region in the Context of the Full-scale Military Invasion
Year: 2025
Type: article
Abstract: This article examines the economic dynamics of the Khmelnytskyi region amid the full-scale Russian invasion. It analyzes economic transformation under martial law, emphasizing structural changes, adaptive mechanisms, and prospects for sustainable development. The war’s impact on macro- and microeconomic indicators is detailed, including a decline in capital investment, industrial output, and exports. A crucial factor was the 2024 centralization of military PIT, which reduced fiscal autonomy and led to significant revenue shortfalls in local budgets. To offset this, state budget transfers increased, providing essential compensation. The study presents statistical evidence on budget revenues, investment, and fiscal activity. A key trend was construction sector growth: in Q1 2024, Khmelnytskyi ranked among national leaders in residential and non-residential commissioning, indicating revived demand and business adaptation. The agricultural sector remained strong, posting record grain and sugar beet yields. In 2024, corn yield reached 10.5 t/ha – the highest in Ukraine – reflecting agro-climatic advantages and sector resilience. The relocation of businesses from war zones contributed to Khmelnytskyi’s role as a logistics hub, diversifying the economy and forming new value chains. The article highlights state support programs such as eRobota and Made in Ukraine. Over 1,000 jobs were created via eRobota, with 60% of microgrants awarded to women, promoting gender inclusion. Made in Ukraine allocated UAH 1.45 billion to support processing, exports, and the real sector. War-related environmental losses, estimated at UAH 1.5 billion, signal the need for integrating ecological recovery into economic policy. Despite martial law challenges, Khmelnytskyi shows notable resilience due to entrepreneurship, state support, IDP inflows, and favorable conditions. However, strengthening fiscal decentralization, promoting innovation, expanding processing, and building global ties remain vital. Future priorities include infrastructure, IT, energy, export growth, and IDP integration. The region provides a scalable model of wartime adaptation for Ukraine.
Language: English
Topic: Economic Issues in Ukraine
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4412588282