This is reported by RBK-Ukraine referencing a forecast from EBRD. Reports are also available from Kontrakty.UA.
The bank notes that Ukraine entered 2025 facing weak economic indicators and rising inflation. The bank has revised its forecast for the country downward this year, as Russia's attacks on energy infrastructure continue to hinder production.
"GDP growth in Ukraine is expected to reach 3.5% in 2025, and then accelerate to 5.0% in 2026, provided a ceasefire is achieved by the end of 2025," the report states.
Although Ukraine commenced 2025 with external funding secured for the year, it is experiencing a slowdown in economic growth and an acceleration of inflation due to the consequences of the war that began with the Russian invasion in February 2022, according to EBRD.
The continuation of the war and intense attacks by Russia on Ukraine’s energy infrastructure have led to power shortages, forcing Ukrainians to pay high prices for imported electricity, and a severe labor shortage. Real GDP growth noticeably slowed from over 5.0% in the first half of 2024 to about 2.0% in the second half; the overall GDP figure for 2024 is estimated at 3.0%.
According to the bank, the resurgence of inflation in the second half of 2024 was driven by rising electricity prices, adjustments to regulated utility prices, rapid growth in real wages, and currency depreciation against the US dollar following the weakening of the exchange rate peg in October 2023.
Annual inflation reached 12% in December 2024 and is likely to remain at a similar level in the first half of 2025, before declining to single digits by the end of the year, the bank predicts.
According to the bank's forecast, the negative factors that affected growth in the second half of 2024 are likely to persist into 2025. On a positive note, the proven resilience and adaptability of businesses, a well-functioning Black Sea trade corridor, strong government consumption stimulus, and increased military procurement from domestic enterprises are expected to support economic growth.