EBRD downgrades Ukraine's economic growth forecast for 2025 to 2.5%
Kyiv • UNN
The European Bank for Reconstruction and Development has lowered its forecast for Ukraine's GDP growth in 2025 to 2.5% due to the impact of Russian aggression and a poor harvest. At the same time, the forecast for 2026 remains at 5%.
The European Bank for Reconstruction and Development has downgraded its forecast for Ukraine's GDP growth in 2025 to 2.5%, according to a new EBRD report dated September 25, writes UNN.
Details
"The forecast for Ukraine's economic growth in 2025 has been revised downwards, as the impact of the ongoing Russian aggression has been exacerbated by a weak harvest," the report says.
As reported, the current forecast for Ukraine's GDP growth in 2025 is 2.5%, while the previous forecast in May predicted growth of 3.3%.
At the same time, according to the forecast for 2026, Ukraine's economic growth is expected to be 5%, the EBRD did not change its assessment.
The report notes that despite the ongoing Russian aggression, Ukraine has largely maintained macroeconomic stability. "Real GDP grew by 0.9% year-on-year in the first quarter of 2025 due to consumption and investment in critical infrastructure, although labor shortages, damage to energy infrastructure, and weak agricultural exports continue to constrain growth," the publication says.
The unemployment rate in Ukraine, as indicated, decreased to its lowest level since the invasion - 12%, "but recruitment remains difficult due to mobilization and emigration."
The current account deficit increased by almost 50% in the period from January to July 2025, "reflecting high imports of military and energy products, as well as weak exports."
"The budget deficit is expected to reach 22% of GDP in 2025, with external financing amounting to about $40 billion, a significant portion of which comes from the EU, G7 (using revenues from frozen Russian assets) and the IMF," the report says.
Inflation in Ukraine, as noted, "remains high, driven by food prices, utilities, and rising real wages, but is gradually decreasing, falling from 15.9% in May to 13.2% in August 2025."
The NBU has kept its key policy rate at 15.5% since March 2025 to moderate inflation, while foreign exchange reserves reached $46 billion in August 2025, covering 5.5 months of imports and supporting exchange rate stability, the EBRD notes.
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Ukraine's economic prospects are highly uncertain and depend on the course of the war, energy security, and continued international support. The government remains committed to macroeconomic discipline and structural reforms, aiming to mobilize public revenues, increase investment, improve the governance of state-owned enterprises, and strengthen the resilience of the financial sector. Real GDP growth in 2025 is projected to be 2.5%. Assuming the end of the war and the beginning of reconstruction, growth could reach 5% in 2026