Andriy Pyshnyy, born Dobrowody in 1974, has just completed nine months as the head of Ukraine’s central bank, a pivotal figure steering the nation’s economy through a turbulent, war-tressed period. Pyshnyy, who has been deaf for 15 years, spoke about his journey and the economic challenges during an interview with EL PERIÓDICO, published through the Prensa Ibérica group. The conversation touches on a wartime economy, the path forward, and the unsettling sense that peace remains elusive while counteroffensives face a uncertain trajectory.
There are now 500 days of conflict on the clock. How far has the economy slipped since Russia launched its large-scale attack?
The year has seen a stark contraction, with GDP dropping 29 percent. It marked the deepest decline in Ukraine’s modern history. The encouraging note early in the war was that the drop was not as severe as some international projections suggested. The forecast for the current year anticipates a modest recovery, with growth around 2 percent expected as of April.
What effects did the conflict have on the banking system and its liquidity?
The Ukrainian banking sector demonstrated remarkable resilience. Banking operations continued uninterrupted throughout the war, including during the major power outage on October 22, 2022. This strength was aided by ample reserves and preexisting crisis protocols. By July 1, liquidity in the banking system had risen by 570 trillion hryvnia, reflecting the system’s ability to cope with extraordinary stress.
Still, there was heavy borrowing to cover the budget deficit. Isn’t that dangerous?
The initial shock of the war disrupted tax payments and created additional demand for defense funding and social subsidies. Monetary financing through new money was limited from July 2022 onward, and since the start of the year there has been no new issuance. The budget deficit was financed from domestic debt market revenues, taxes collected from Ukrainian businesses, and international aid. The system was managed to prevent liquidity from slipping, even as the country faced mounting costs.
It looks promising in some lights. Do you dismiss the risk of Ukraine facing bankruptcy?
The situation is carefully monitored. While the country carried a record budget deficit, that gap has been closed. This is not a rosy fantasy but an assessment of the current state. The real challenge lies in the ongoing war and the fiscal consequences that come with a substantial decline in economic activity.
Kiev agreed to secure a sizable loan from the International Monetary Fund. Could this jeopardize the nation’s autonomy?
The stance is clear. The IMF partnership does not threaten sovereignty; it supports the nation on the road to stability and victory. At the moment, the country faces an external threat from Russia, its regime, and its troops, while seeking to strengthen economic independence through international cooperation.
How long will the IMF program run?
The agreement outlines a four-year collaboration. Ukraine aims to maximize grants within the program to ease the exhausted economy, with current funding exceeding 115 billion dollars in the base scenario. A more challenging scenario imagines up to 140 billion dollars, yet international partners have affirmed ongoing support regardless of the timeline. The country remains deeply reliant on sustained international financial backing.
Which model is Ukraine moving toward?
The aim is clear: closer integration with the European Union and a steadfast commitment to meeting EU and NATO standards. The reforms required are ambitious and demanding, but the leadership believes they will be achieved. The focus is on building a future aligned with European institutions, leaving the past behind as a foundation for the new path.
What happens to banks with ties to Russian clients?
Those benefiting from sanctions by the European Union, the United States, or Ukraine face confiscation when allowed by court decisions. Banks deemed systemically important can enter an expropriation process led by the Central Bank to maintain stability. State ownership in the sector is already substantial, exceeding 60 percent, which means any consolidation or seizure would be managed to preserve operations and accelerate a sale when feasible.
You have hearing difficulties, so you bring a personal sensitivity to these issues. Are you concerned about the disabled and other vulnerable groups left behind by the war?
Welfare for people with disabilities remains a priority. The author of this interview shares a personal experience after losing hearing 15 years ago, which fosters a deeper understanding of the challenges faced by those with disabilities. The aim is to ensure the banking system and the broader environment become more inclusive and accessible. The commitment extends to veterans and those who have suffered the most in the conflict. The effort includes adapting services and protections in ways that acknowledge the diverse needs of the population.