This is reported by RBK-Ukraine, referencing the European Commission's forecast for (autumn 2024). The information comes from Kontrakty.UA.
The forecast indicates that despite ongoing and escalating attacks on critical infrastructure, Ukraine's economy remains surprisingly resilient. Supported by export potential, high defense expenditures, and household demand, growth is expected to reach 3.5% in 2024, before slowing to 2.8% in 2025.
"Given the intensification of hostilities, recovery is now projected to gain momentum only in 2026," the European Commission added.
Inflation is anticipated to rise to 9.2% in 2025 due to sharp increases in energy prices and wage growth, but is expected to ease in 2026 as supply-side pressures diminish.
According to the European Commission, Ukraine's real GDP grew by 5.0% year-on-year in the first half of 2024,
"While real GDP growth is expected to slow compared to 2023, it is projected to remain relatively high at 3.5% in 2024."
Reconstruction Delayed
The forecast is based on the assumption that conditions for a gradual increase in early reconstruction efforts will be established later than previously anticipated, starting in early 2026.
As a result, it is forecasted that real GDP growth will further slow in 2025, as resource constraints, including labor shortages, export capacity limitations, and energy deficits, exert increasing pressure on economic activity.
Overall, real GDP growth is expected to decelerate to 2.8% in 2025, before reaching 5.9% in 2026, "once conditions are created for a gradual increase in reconstruction efforts and confidence improves."
The European Commission notes that the forecast is subject to extremely high uncertainty, with risks largely skewed to the downside. Further escalation of the conflict could lead to higher resource costs, additional loss of production capacity, and an increase in the number of displaced persons.
Ukraine's Economic Forecasts
Recall that in October, the International Monetary Fund downgraded its growth forecast for Ukraine's economy for 2024 from 3.2% to 3.0% due to the impact of Russian strikes on energy infrastructure.
In July, the Ukrainian government significantly lowered its growth forecast for the economy in 2025 to 2.7%. Previously, growth was expected to be 6.8%.
The NBU improved its forecast for the growth of Ukraine's real gross domestic product (GDP) in 2024 from 3.7% to 4.0%.