The European Bank for Reconstruction and Development (EBRD) has lowered its forecast for Ukraine’s real GDP growth in 2025 from 3.3% to 2.5%, while keeping the 2026 projection at 5.0%, assuming the war with Russia will have ended by then.

Source: EBRD, as reported by Interfax-Ukraine

Details: Ukraine’s GDP growth is expected to slow to 2.5% in 2025 amid high uncertainty related to Russia’s war against the country, the EBRD said in a report.

The bank notes that Ukraine’s economic outlook remains highly uncertain and depends on the course of the war, energy security and continued international support.

It is highlighted that real GDP grew by 0.9% year-on-year in the first quarter of 2025, driven by consumption and investment in critical infrastructure. However, labour shortages, damage to energy infrastructure and weak agricultural exports continue to constrain growth.

The unemployment rate has fallen to a war-time low of 12%, but recruitment remains challenging due to mobilisation and emigration.

The EBRD points out that Ukraine’s current account deficit rose by almost 50% in January-July, reflecting high imports of military and energy products and weak exports. External financing is expected to reach around US$40 billion.

Inflation remains high, driven by food and utility prices and rising real wages, but is gradually declining: from 15.9% in May to 13.2% in August 2025.

Background:

The National Bank of Ukraine forecasts a significant budget deficit in 2025 (22% of GDP) and a slow reduction in 2026 (to 19% of GDP), considering substantial defence needs.In August, the National Bank reported it expects economic growth of 2.1% for the year, although Economy Minister Oleksii Sobolev believes it could be even lower at 2.0%.

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