The European Bank for Reconstruction and Development (EBRD) has revised its economic growth forecast for Ukraine for 2026 downward. The new analytical report emphasizes that the protracted war and systematic damage to critical infrastructure are putting serious pressure on the country’s economic activity.
This is reported by Finway
Main factors of economic slowdown
Despite significant financial support from Western partners, the real sector of Ukraine’s economy is forced to adapt to a prolonged period of moderate development. Previously, EBRD experts expected GDP growth in 2026 to be at 2.5%, but this figure has now been lowered to 2.2%. The bank also revised last year’s results, recording real GDP growth in 2025 at only 1.8% – a worse outcome than in previous forecasts.
Among the main reasons for the economic slowdown, the bank’s analysts identified two key destructive factors affecting industry, the agricultural sector, and services:
- Critical labor shortage. Mass migration of the population and mobilization processes lead to structural unemployment and a lack of personnel, preventing enterprises from operating at full capacity.
- Ongoing destruction of energy infrastructure. Regular attacks on energy facilities cause prolonged power outages, complicate logistics, and increase production costs.
“The country’s economic indicators in 2025 were shaped by constant wartime restrictions. The labor shortage and ongoing attacks on energy infrastructure disrupted industrial activity and logistics, while broader supply issues limited production. This pressure continued into 2026, resulting in moderate economic growth despite the resilience of firms and households,” the report states.
Inflation, budget, and recovery prospects
An additional negative factor has been the rise in inflation. After reaching a local minimum in January 2026, when consumer inflation fell to 7.4% due to the National Bank’s strict policy, prices began to rise again. Domestic inflation is also exacerbated by external conditions: the escalation of the conflict in the Middle East has led to an increase in energy resource prices globally, adding financial burdens for Ukrainian enterprises and consumers.
Despite the downward revisions of the GDP forecast, the EBRD emphasizes that Ukraine’s macroeconomic stability remains under control thanks to unprecedented support from international donors. The state budget deficit, excluding grants, reached 23.6% of GDP in 2025, and is expected to be at 19.3% of GDP in 2026. The country cannot cope with such expenses on its own.
Critical risks for the hryvnia and the budget are mitigated by an agreed package of international financial assistance, which provides over 110 billion euros for 2026–2027. Significant support is also provided by the EBRD, which has invested nearly 10 billion euros in Ukraine since the beginning of the full-scale invasion, aimed at restoring energy, transport infrastructure, and developing private business.
Bank specialists note that a return to rapid economic growth at the level of 4% is possible no earlier than 2027 – provided that the intensity of hostilities decreases.