EBRD Lowers Ukraine’s Economic Growth Forecast for 2025
The European Bank for Reconstruction and Development (EBRD) has revised its forecast for Ukraine’s GDP growth in 2025 downward from 3.5% (as predicted in February) to 3.3%.
Details: The bank maintained its 2026 forecast at 5.0%, assuming an end to Russia’s war against Ukraine and the subsequent benefits of post-war reconstruction.
“Global trade pressures as well as war weighing on 2025 economic expectations. Ukraine’s GDP growth is expected to slow to 3.3 per cent in 2025, with recent global trade frictions adding additional downside risks to already high uncertainty related to Russia’s war on the country,” the statement reads.
The EBRD highlighted that stable external funding from the EU under the Ukraine Facility, along with proceeds from frozen Russian assets provided by G7 countries under the Extraordinary Revenue Acceleration (ERA) mechanism, are expected to fully cover Ukraine’s external and fiscal deficits in 2025, thus supporting macroeconomic stability.
Growth is also expected to be driven by strong government consumption and increased military procurement from domestic industry.
However, the bank noted that from mid-2024, economic growth has slowed and inflation has accelerated due to the ongoing war triggered by Russia’s full-scale invasion in February 2022.
GDP growth in 2024 slowed significantly – from over 5.0% in the first half of the year to around 2.0% in the second half – bringing the annual figure down to 2.9%.
The slowdown is attributed to electricity shortages caused by Russian attacks, a poor harvest and an acute labour shortage linked to war-related needs.
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