The European Bank for Reconstruction and Development has revised its forecast for Ukraine’s real GDP growth in 2025 to 3.3% from the 3.5% it expected in February, and maintained its forecast for 2026 at 5.0%, assuming Russia’s war against Ukraine ends.
“Global trade pressures, as well as the war, are weighing on economic expectations for 2025. Ukraine’s GDP growth is expected to slow to 3.3% in 2025, and recent global trade tensions will add additional risks to the already high uncertainty surrounding Russia’s war against the country,” the latest edition of the EBRD’s flagship economic report, EBRD Regional Economic Outlook, says.
It is noted that stable external financing from the EU under the Ukraine Facility and proceeds from frozen Russian ERA assets provided by the G7 countries will fully cover the external and fiscal deficits in 2025, supporting macroeconomic stability. A strong stimulus from public consumption and increased military procurement by domestic industry are expected to support economic growth.
At the same time, the bank noted that since mid-2024, there has been a slowdown in economic growth and an acceleration in inflation due to the impact of the war that began with the Russian invasion in February 2022.
The EBRD recalls that real GDP growth in 2024 slowed markedly from over 5.0% in the first half of the year to around 2.0% in the second half, as a result of which the overall indicator decreased to 2.9%. Among the reasons are electricity shortages due to Russian attacks, poor harvests and acute labor shortages in the economy caused by war-related needs.
“While agriculture, energy production and trade contracted, other sectors showed solid growth despite the challenging conditions and the war. Business demonstrated resilience and adaptability, which, combined with the take-off of the Black Sea Trade Corridor of Ukraine in 2024, led to a resumption of export growth after two years of sharp decline,” the bank added.
The report also said that in the EBRD’s regions of operation — Central and Eastern Europe, Central Asia and the Southern and Eastern Mediterranean (SEMED) — average growth rates slowed from 3.4% in 2022 to 2.7% in 2023 and remained broadly stable at 2.8% in 2024.
“However, a sharp increase in trade and economic policy uncertainty in 2025, driven by heightened global political uncertainty, weakening external demand, and the direct and indirect impact of announced import tariff increases, prompted the EBRD to lower its regional May forecast for this year by 0.2 percentage points to an average of 3%, and then raise it to 3.4% in 2026, unchanged from February,” the publication notes.
