In a rapidly shifting economic landscape across the Middle East and Eastern Europe, three countries—Ukraine, Egypt, and Iran—are navigating complex challenges and opportunities in their export sectors. Recent data and government initiatives reveal diverging trends: Ukraine faces a significant drop in exports and a widening trade deficit, Egypt is doubling down on ambitious export-driven industrial expansion, and Iran continues to deepen its trade ties with Iraq, aiming for a record annual target.
According to the State Statistics Service, Ukraine’s export performance in the first half of 2025 paints a sobering picture. The country exported goods worth $20 billion, marking a 4.2% decrease compared to the same period last year. Meanwhile, imports surged by 15.6% to $38.6 billion. These opposing currents have led to a ballooning negative trade balance, now standing at $18.51 billion—up sharply from $12.43 billion a year ago. The figures underscore mounting pressure on the Ukrainian economy, which continues to grapple with the aftershocks of conflict, global market volatility, and agricultural setbacks.
Delving deeper, the export decline was driven largely by a 24.2% drop in grain crop sales, which fell to $3.99 billion. This was attributed to a worse-than-expected harvest, a blow for a country long considered Europe’s breadbasket. However, not all sectors suffered losses. Exports of electrical machines rose by 12.9% to $1.25 billion, ferrous metals increased by 5% to $1.54 billion, and fats and oils of animal or vegetable origin saw a modest 2.6% uptick to $3.16 billion. These pockets of growth offer some hope, but they weren’t enough to offset the broader downturn.
On the import side, Ukraine’s appetite for electric machines soared—imports in this category jumped by a staggering 70.7% to $5.56 billion. Other notable increases included mineral fuels, oil and refining products (up 21% to $5.14 billion), land transport excluding railways (up 7.7% to $4.19 billion), and nuclear reactors, boilers, and machines (up 7.3% to $3.35 billion). The surge in imports, coupled with declining exports, has deepened the country’s trade woes and raised questions about its economic resilience in the face of ongoing challenges.
While Ukraine struggles to balance its trade ledger, Egypt is forging ahead with a bold export-focused strategy. On August 17, 2025, the General Authority for Investment and Free Zones (GAFI) convened a pivotal meeting with investors to discuss development plans in line with the Ministry of Investment and Foreign Trade’s “Investment for Export” agenda. The urgency of the gathering was underscored by the fact that Egypt’s nine existing public free zones are now at a staggering 95% occupancy rate, signaling both success and the need for expansion.
In response, the Ministerial Committee for Industrial Development, chaired by Deputy Prime Minister Kamel Al-Wazir, approved GAFI’s proposal to establish four new public free zones in 10th of Ramadan, New October, New Borg El Arab, and New Alamein. GAFI CEO Hossam Heiba emphasized that production from these new zones will be entirely export-oriented, aligning with Egypt’s ambitious target of reaching $140 billion in exports by 2030. Heiba noted that this model is designed to prevent competition with local investors in the domestic market while promoting fair investment, leveraging incentives, and prioritizing environmental compliance.
"The four new zones are expected to begin operations by the end of 2026," Heiba stated, highlighting GAFI’s coordination with the New Urban Communities Authority to expedite infrastructure development. The move comes as demand for industrial investment in Egypt continues to grow, and authorities are keen to capitalize on this momentum. In parallel, GAFI is studying the activation of three additional public free zones, which would bring the total to sixteen and further cement Egypt’s status as a regional export powerhouse.
To ensure these zones deliver on their promise, the meeting resulted in the formation of a joint working group comprising representatives from various industrial sectors. Their mission: to enhance the performance of public free zones and guarantee alignment with national export objectives. The collaborative approach underlines Egypt’s commitment to sustainable, export-led growth, even as global economic headwinds persist.
Meanwhile, Iran is quietly but steadily strengthening its trade relationship with neighboring Iraq. From March 21 to July 22, 2025, Iran exported non-oil commodities valued at $3 billion to Iraq, according to Foroud Asgari, head of the Islamic Republic of Iran Customs Administration (IRICA). This makes Iraq Iran’s second-largest non-oil export destination during this period. The momentum builds on a strong performance in the previous Iranian calendar year, when Iran exported $11.9 billion worth of non-oil goods to Iraq.
Both nations have set their sights high, targeting $20 billion in annual trade. The scale of their economic engagement is impressive: Iran exports over 2,200 types of goods and products to Iraq, with more than half of active Iranian traders present in the Iraqi market. Abolfazl Akbarpour, deputy head of IRICA for planning and international affairs, underscored the determination on both sides to expand bilateral economic exchanges, citing Iran’s vast export capacity and Iraq’s robust market, buoyed by $85 billion in foreign currency reserves, 130 tons of gold, and 147 billion barrels of proven crude oil reserves.
Strengthening this relationship isn’t just about numbers. Iran is actively working to develop trade infrastructure, encourage investment, promote trade delegations, and participate in joint exhibitions. In early May 2024, Tehran hosted the sixth meeting of the Iran-Iraq Joint Economic Committee, where officials from both countries hashed out cooperation in sectors ranging from commerce and industry to energy, finance, tourism, and health. "Economic relations between Iran and Iraq are very good, and we hope these relations will improve," said Mohammad Kazem Ale-Sadeq, Iran’s ambassador to Iraq, reflecting optimism about the future of bilateral ties.
For Iran, boosting non-oil exports to neighboring countries is a strategic priority. The country shares land or water borders with 15 nations, making regional trade a linchpin of its economic policy. The focus on non-oil commodities—ranging from industrial products to consumer goods—also reflects a broader push to diversify the economy and reduce reliance on oil revenues, a lesson driven home by years of sanctions and global market fluctuations.
As Ukraine grapples with a shrinking export sector and a widening trade deficit, Egypt and Iran are charting courses aimed at robust, sustainable export growth. Whether by building new industrial zones or deepening cross-border partnerships, these countries are betting that exports can drive prosperity—even in a world where the rules of trade are constantly being rewritten.
