UKR Dispatch: April '25 I
Stalled on the battlefield, negotiations continue.
Security //
Russian Territorial Advances Continue Despite Slowing Pace
According to the latest Russia-Ukraine War Report Card from April 16, 2025, Russian forces gained 142 square miles of Ukrainian territory in the past month, with the pace of advance picking up again this week to 50 square miles, nearly double the prior week's advance. The Institute for the Study of War's latest Russian Offensive Campaign Assessment from April 16 provides detailed analysis of ongoing Russian operations in the Siversk and Chasiv Yar directions, where Russian forces continue offensive operations but have made limited advances.
European Allies Step Up Military Support as US Shifts Focus
At a recent NATO meeting in Brussels, European allies vowed to increase weapons deliveries to Ukraine as US support changes under President Donald Trump's administration. British defense minister John Healey announced that "overall some 21 billion euros ($24 billion) more has been promised towards helping arm Ukraine," including a British surge support worth $450 million featuring thousands of drones. German defense minister Boris Pistorius emphasized, "We take on more responsibility as Europeans," as the US shifts its approach to negotiating a peace deal.
Ukraine Develops Domestic Drone Alternatives to Replace Chinese Equipment
Ukraine's government-backed defense innovation program Brave1 has conducted comprehensive tests of over a dozen domestically produced small first-person view (FPV) bombing drones designed to replace Chinese-made Mavic drones. According to Euromaidan Press, eight Ukrainian companies showcased potential replacements, with several models successfully completing tests that required flying 10 kilometers under electronic warfare interference, dropping munitions on target, and returning safely.
Economics // Trade
National Bank of Ukraine Maintains Key Rate at 15.5%, Revises Economic Forecasts
The National Bank of Ukraine (NBU) has decided to maintain its key policy rate at 15.5% as of April 18, stating this decision "will help maintain the stability of the foreign exchange market, maintain control over inflation expectations and gradually slow inflation to the 5% target." The NBU has also revised its inflation forecast for 2025 from 8.4% to 8.7% and downgraded GDP growth projections to 3.1% for 2025, down from the previous estimate of 3.6%.
IMF Continues Support with $0.4 Billion Disbursement Following Seventh Review
The International Monetary Fund and Ukrainian authorities reached a staff-level agreement on the Seventh Review of the 4-year, $15.5 billion Extended Fund Facility Arrangement in February. Upon IMF Executive Board approval, Ukraine is expected to receive approximately $0.4 billion, bringing total disbursements under the program to $10.1 billion. The IMF noted that "program performance remains strong" with all end-December quantitative performance criteria being met, though the economic outlook "remains exceptionally uncertain as the war continues".
Foreign Investment in Ukraine's Defense Industry Accelerates
International companies are increasingly investing in Ukraine's defense industry despite ongoing hostilities. According to a CEPA report, the Ukrainian government forecasts domestic defense production could reach $35 billion this year, up from $20 billion in 2024. European companies have been particularly active, with Denmark investing approximately $970 million in Ukraine's defense industry and encouraging others to follow the "Danish model" of purchasing weapons directly from Ukrainian companies. Major manufacturers including Rheinmetall, KNDS, and AeroVironment are opening production facilities and forming joint ventures with Ukrainian partners6.
Government // Policy
Paris Hosts High-Level Diplomatic Talks on Ukraine Peace Process
French President Emmanuel Macron recently hosted talks in Paris with top US officials and Ukrainian President Volodymyr Zelenskyy focused on ending the Russia-Ukraine war. During the meeting, Zelenskyy urged allies to "exert pressure on Russia to agree to a ceasefire," stating that "Russia exploits every moment to inflict harm. We must hold the aggressors accountable." The talks follow separate discussions between US officials and Russian Foreign Minister Sergey Lavrov, with the US State Department reporting they communicated "the framework for a sustainable and lasting peace".
Peace Negotiations Continue with Complex Dynamics Between US, Ukraine, and Russia
Recent developments in peace negotiations have been characterized by shifting relationships between key players. According to recent reports, renewed negotiations began in early 2025 after Donald Trump became US president, with a February 12 phone call between Trump and Putin, followed by US officials meeting with Zelenskyy. The relationship between Trump and Zelenskyy has reportedly deteriorated, with tensions emerging over Ukraine's approach to potential territorial concessions and security guarantees. Meanwhile, British Prime Minister Keir Starmer and French President Emmanuel Macron have proposed a plan for a ceasefire protected by a "coalition of the willing" with troops in Ukraine.
Government Incentives Attract Foreign Investment Despite War Risks
The Ukrainian government has implemented several initiatives to attract foreign investment despite the ongoing conflict. According to MP Halyna Yanchenko, Secretary of Ukraine's National Investment Council, the government is actively encouraging co-production initiatives through programs like the UK Export Finance (UKEF) initiative, which mitigates risks and finances investment projects. European companies have been particularly successful in entering the Ukrainian market thanks to public-private cooperation models under which governments take responsibility for potential losses. This approach has helped attract investment in critical sectors including defense, energy, and construction materials production.