Better at fighting; worse at governing
Ukraine’s improved “middle-strike” capability is emerging as one of the more important battlefield shifts of the current phase of the war. What initially looked like another round of optimistic reporting is increasingly supported by the gap between Russia’s still-high assault intensity and its negligible territorial gains: Moscow continues to throw men into attacks, but achieves little, suggesting that Ukrainian strikes on depots, command posts, equipment concentrations and logistics nodes are having real operational effects. The significance is not only that Ukraine seems to have narrowed or even reversed the middle-strike disadvantage that favored Russia in 2024–2025, but that it is doing so largely with domestically-controlled weapons rather than systems constrained by Western political caution. Just as importantly, these strikes appear to be steadily degrading Russian air defenses, opening room for deeper attacks on occupied Crimea and on export infrastructure inside Russia. This does not change the fundamental logic of the war, but it likely does reshape the spring-summer campaign by raising the cost and reducing the effectiveness of Russia’s offensive operations.
Ukraine’s internal political machinery is slipping into a more dangerous form of paralysis. The Yulia Svyrydenko cabinet is caught between donor-funded largesse and the fiscal tightening needed to keep external financing credible. After the government floated poorly prepared consolidation measures and business resisted, the IMF quietly downgraded them from prior actions to benchmarks, preserving the program but weakening the credibility of conditionality. Parliament drew the obvious lesson: the government claims credit for spending, while MPs are left to absorb the political cost of tightening. Since the fall of presidential office head Andrii Yermak, the Rada has also stopped treating the Cabinet as a force capable of imposing discipline. The deeper problem is structural: anti-corruption cases have helped dismantle the informal vote-management machinery that once held the post-2019 majority together, producing a Parliament that may be cleaner but is also less governable. Unless Svyrydenko restores governability quickly, a cabinet reshuffle by mid-summer looks increasingly likely.
Economically, Ukraine entered spring under growing macro pressure, with the hryvnia briefly weakening to 44.5 per dollar before stabilizing below 44. Agro-exports showed a mixed start despite a stronger 2025 grain harvest. February CPI rose to 7.6% y/y while PPI surged by 34.5% y/y on energy costs. The NBU paused its easing cycle and kept the policy rate at 15%, as oil-price and external financing risks intensified. Fiscal revenues remained solid, but spending stayed cautious, amid delays with external funding. Meanwhile, the external gap widened sharply, but gross reserves remained at a solid level at $54.8 billion by the end of February.
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