EBRD lowered its forecast for Ukraine's GDP growth in 2025 to 3.3%
Kyiv • UNN
EBRD lowered its forecast for Ukraine's GDP growth in 2025 to 3.3%. The forecast for 2026 remains at 5% if the ceasefire is implemented.
The European Bank for Reconstruction and Development (EBRD) has lowered its forecast for Ukraine's growth in 2025 to 3.3% from 3.5%, and the forecast for 2026 will remain unchanged at 5% if the ceasefire is stopped, the organization said on Tuesday, UNN writes.
Ukraine's GDP growth is expected to slow to 3.3% in 2025, and recent global trade conflicts will add additional risks to the already high uncertainty associated with Russia's war against the country.
The previous report in February predicted growth of 3.5% in 2025.
At the same time, the EBRD maintains its forecast for Ukraine's real GDP growth in 2026 unchanged at 5% if the ceasefire is stopped and benefits from post-war reconstruction are received.
External financing to support Ukraine's budget is secured for 2025, the report said. But since mid-2024, there has been a slowdown in economic growth and an acceleration of inflation due to the impact of the war, which began with the Russian invasion in February 2022.
Real GDP growth in 2024, as noted, slowed markedly from over 5.0% in the first half of the year to approximately 2.0% in the second half, resulting in an overall decrease to 2.9%. The reasons, according to the EBRD, included power shortages due to Russian attacks, poor harvests and acute labor shortages in the economy caused by the demands of the war.
"While agriculture, energy production and trade have declined, other sectors have shown steady growth, despite difficult conditions and war," the EBRD said. Enterprises, as indicated, have demonstrated resilience and adaptability, which, combined with the boom in 2024 of the Black Sea Trade Corridor of Ukraine, has led to a recovery in export growth after two years of sharp decline.
External financing, as reported, remained at the level of 2023, covering the current account deficit and allowing Ukraine to maintain adequate official foreign exchange reserves. The recovery of inflation at the end of 2024, the report notes, was the result of rising electricity costs and high growth in real wages. Ukraine abolished the peg of its currency in October 2023, since then the value of the hryvnia has fallen by about 10 percent against the US dollar, the EBRD added.
"In March 2025, inflation was 14.6% and is expected to remain high in the first half of 2025, but should fall to a single digit by the end of the year. In response, the National Bank of Ukraine raised the discount rate by 250 basis points from December 2024, reaching 15.5% in early March 2025," the report said.
Stable external financing from the EU within the Ukraine Facility and income from frozen Russian assets provided by the G7 countries are reported to "fully cover external and fiscal deficits in 2025, supporting macroeconomic stability." A strong stimulus from public consumption and increased military procurement in domestic industry are expected to support economic growth, the EBRD said.
The EBRD, Ukraine's largest institutional investor, has reportedly significantly increased its support in response to the war. Over the past three years, the Bank has allocated more than EUR 7 billion to Ukraine, including EUR 2.4 billion to the energy sector, supporting the real economy, the EBRD added.
