Four years after the invasion began, the Ukrainian economy is not only holding steady, but even showing signs of growth. Germany has positioned itself as an important partner on Ukraine’s path to EU accession.
The Federal Republic is helping to ensure that the economy of the country, which is attacked by Russian drones almost every night, is doing comparatively well. The two countries are now cooperating in all four areas of the EU single market, even though Ukraine is not yet a member of the EU: goods, services, people and capital.
In 2025, two-way trade in goods alone reached a record high, while ties in the areas of services, labour and investment continued to deepen. Preliminary data for 2025 shows a trade volume of €12.4 billion, which exceeds that between Russia and Germany by 52 per cent. The relationship is not one-sided: Ukraine is important for Germany’s supply chains and labour market, just as Germany remains one of Ukraine’s most important economic partners.
Germany has a trade surplus with Ukraine. Before the war, cars and trucks, medicines and agricultural machinery dominated German exports to Ukraine. Since 2022, the structure has changed significantly and Germany now exports mainly defence and military goods. Ukraine has become an important target market for these high-tech and often dual-use goods.
Conversely, agricultural products play an important role. Ukraine supplies a large part of Germany’s rapeseed requirements, as well as maize and soybeans. Together, these exports contribute to Germany’s food security and underline Ukraine’s role as a reliable supplier, even during the war.
Furthermore, wires and cables remain important export goods from Ukraine and demonstrate the country’s integration into the EU’s automotive supply chain. When the war broke out, Volkswagen had to introduce short-time working at its plants in Zwickau and Dresden for a short period of time, as these components could not be imported from Ukraine in the first months of the war.
The Federal Ministry for Economic Affairs and Energy supports bilateral economic relations with a variety of instruments. For example, Hermes insurance protects German export transactions to Ukraine against economic and political risks. Since the beginning of the war, export transactions worth €1.5 billion have been insured under this public guarantee system.
Bilateral relations in the service sector have also deepened since 2022. The volume of trade in services has almost doubled from €900 million in 2021 to €1.6 billion in 2024. Before the war, Germany imported mainly Russian gas via Ukraine for many years – the country thus served as a transit service provider. Today, Ukraine is increasingly providing IT services.
In 2023, the trade balance for services shifted, and Germany is now a net exporter of services to Ukraine. This largely reflects statistical effects related to Ukrainian refugees, as their spending in Germany is recorded as German exports of travel services based on bank transfers.
Behind the figures lies continued strong cooperation in IT and other service sectors, which still has growth potential. In 2024, the EU overtook the US as the most important market for Ukrainian IT services: Germany is the third most important destination country within the EU. Ukraine’s steps towards joining the European digital single market are likely to be followed by closer relations in the IT sector.
Ukrainians in Germany
The migration of people has become the most visible aspect of the relationship. Before Russia’s full-scale invasion, records show that around 155,000 Ukrainians were living in Germany. By the end of 2024, that number had risen to more than 1.3 million, making Germany home to the largest Ukrainian population in Europe.
Women and children make up the majority of Ukrainians in Germany, while many young adults are of working age and can enter the labour market. Germany focused on long-term integration and prioritised language acquisition and skills development over rapid employment. This initially led to a lower employment rate than in some other countries, but the results have improved. By January 2026, 374,000 people with Ukrainian citizenship were employed, according to the Federal Employment Agency. This represents 38% of the total Ukrainian population of working age.
German companies show great interest in Ukraine
Business relations further strengthen ties. Despite the war, large German companies continue to operate, and new investments are still of interest. The number of member companies of the German-Ukrainian Chamber of Commerce rose by 75 per cent between the start of the war and the end of 2025. Germany is one of Ukraine’s most important investment partners. The stock of direct investment by German companies amounted to $2.2 billion in the third quarter of 2025. Major German companies such as Bayer, Fixit, Notus and Goldberg Solar have announced new investments and begun to implement them.
As foreign direct investment is one of the most important drivers of economic growth, the German government actively promotes German investment in Ukraine. Despite Russia’s attacks, the German government has maintained its public guarantee system against war risks for German investors in Ukraine. What is more, Ukraine has become the number one target country for this public guarantee system offered by the German government. Since 2022, 50 projects have been insured under this scheme.
From a macroeconomic perspective, however, current foreign direct investment inflows remain below the level required for Ukraine’s economic recovery. This could be improved through joint efforts by Germany and Ukraine. These include a recent study monitoring progress on 30 reform proposals identified by German companies in Ukraine, further integration into the European single market, and joint efforts to improve investment security.
Source: Frankfurter Allgemeine.
