Ukraine’s gross domestic product is projected to grow by 2% in 2025 and by 2.8% in 2026, according to analysts. This data is provided by the Institute for Economic Research and Political Consulting in collaboration with the German Economic Team. These figures are slightly lower than the February expectations, which anticipated GDP growth of 2.9% in 2025 and 3.2% in 2026.
This is reported by Finway
Factors Affecting the Slowdown in Growth
The main reason for the downward revision of the forecast is attributed to weaker dynamics in agriculture, industry, and transportation compared to previous expectations. However, experts predict an improvement in the situation in the second half of 2025 due to a revival in industrial production and retail trade.
Nevertheless, the recovery of the economy continues to be hindered by the active phase of the war. It is expected that in 2026, the intensity of hostilities will significantly decrease, allowing the economy to accelerate its growth rate to 2.8%.
Inflation Dynamics and Key Challenges
Inflation in Ukraine is estimated to be 13.2% in 2025 and to decrease to 6.7% in 2026. Leading expert from the Institute for Economic Research and Political Consulting, Vitaliy Kravchuk, notes that a weakening of price pressure on certain groups of food products is expected in the second half of 2025.
“In 2026, a decrease in cost pressure on inflation is anticipated, while the recovery of demand is forecasted to be moderate. The rise in prices for heating and gas, which we assume will occur, will increase the consumer inflation rate,” the forecast states.
The current account deficit in 2025 may reach 11.8% of GDP, and in 2026, it could grow to 17.9%. This is linked to a decrease in grain exports and an increase in imports of military and energy equipment. Ukraine’s state debt is approaching 100% of GDP, which is due in part to additional loans under the G7’s ERA instrument.
In 2026, experts predict a financing gap of $10–15 billion. The International Monetary Fund currently does not foresee the allocation of additional funds, and a decision regarding the use of frozen Russian assets in the EU has yet to be made.
Among other significant challenges for the Ukrainian economy are the labor shortage and logistics issues, which continue to be substantial barriers to business development.