Analysts at the investment company Dragon Capital have revised their macroeconomic forecast for Ukraine for 2025, lowering the expected growth of real GDP to 2%. This figure is linked to the continuation of hostilities, the exhaustion of previous drivers of economic recovery, and the loss of part of the country’s production capacity.
This is reported by Finway
GDP Forecast for 2026 and the Impact of a Ceasefire
In the baseline scenario for 2026, Dragon Capital expects further slowing of GDP growth to 1.5%. At the same time, it is anticipated that the expansion of the defense industry will become one of the main factors supporting the economy. In particular, production in this sector could reach $20 billion in 2026, significantly exceeding the figure for 2024 ($9 billion). Steady consumer demand will also remain an important factor in economic activity.
Meanwhile, under an optimistic scenario, if a sustainable ceasefire is achieved at the beginning of 2026, Ukraine’s GDP growth could accelerate to 5%. This would be possible due to a revival in investment, the partial return of refugees, and an increase in export volumes.
Inflation Forecast for 2025–2026
Analysts at Dragon Capital predict that by the end of 2025, inflation will slow to 9.3%. This will occur due to a decrease in fundamental inflationary pressure and the high base effect in the food segment. For 2026, if the war continues, further inflation decline to 5.3% is expected. However, under a ceasefire, inflation could rise to 7.5% due to increased consumer demand and rising utility tariffs.
“In the baseline scenario, which assumes the continuation of the war, real GDP growth in 2025 will slow to 2% compared to 0.9% in the first quarter due to the exhaustion of previous growth drivers and the loss of production capacity.”