Economist and financial analyst Oleksiy Kush warns that Ukraine faces the threat of stagflation, or the so-called
This is reported by Finway
“death spiral”
, where there is a significant increase in inflation alongside a decline in gross domestic product (GDP). He noted that
“How close is our economy to the ‘death spiral’? In the first quarter of 2025, real GDP grew by 0.5% year-on-year. This is almost zero growth with the risk of transitioning to zero and even negative dynamics in the second quarter of the current year. The consumer price index in 2025 (compared to the same period last year) was 14% in April”
, Kush reminded us.
Factors Leading to Recession
The threats of an internal recession are caused by several factors, among which are the lack of an effective industrial policy concept, a monetary policy not oriented towards the goals of economic growth, and the absence of a general growth model adapted to wartime conditions. The expert emphasizes that
“If urgent measures are not taken, we may expect a gradual cooling of the economy by summer”
.
State of Industrial Production
Analyzing industrial production, Kush notes that stable economic processes are observed only in the defense sector. Meanwhile, the
“rear economy”
is gradually dying under the influence of rampant inflation and rising energy resource prices, the analyst concluded.