The National Bank of Ukraine (NBU) has published a forecast indicating that Ukraine’s economy will continue to grow in 2025. In 2024, the real gross domestic product (GDP) grew by 2.9%. Although growth has slowed compared to 2023, when the rate was 5.5%, the Ukrainian economy has shown recovery for the second consecutive year, despite ongoing attacks by Russia on production facilities and infrastructure.
This is reported by Finway
Factors Influencing Economic Growth
The NBU noted that the slowdown in GDP growth in 2024 was a noticeable consequence of the deteriorating security situation, the restoration of electricity shortages, and low harvests.
“The economy was instead supported by high domestic demand, a soft fiscal policy, significant business adaptability, as well as the NBU’s efforts to ensure macro-financial stability,” the comment stated.
The actual growth rates turned out to be lower than the forecast published in the January 2025 Inflation Report, where the NBU estimated them at 3.4%. This is primarily related to the recovery of GDP decline in the fourth quarter of 2024 by 0.1 percentage points due to a significant reduction in agricultural output by 30.3% year-on-year.
Outlook for 2025
Consumer spending continues to support the economic recovery. In 2024, private consumption made the largest positive contribution to real GDP growth, increasing by 6.8%. This growth was supported by high rates of real wage increases.
Investment activity also improved — gross fixed capital formation rose by 3.5% year-on-year. Investments were primarily directed towards building logistics capacities and autonomous energy supply.
Exports finally began to grow, with physical export volumes increasing by 10.3% in 2024 for the first time since 2019, made possible by the stable functioning of the maritime corridor. At the same time, imports continued to rise by 7.7%. The positive contribution of net exports remains negative at -0.9 percentage points, although it has decreased compared to previous years.
The NBU believes that economic growth will continue in 2025 due to the expected increase in harvests, a reduction in electricity shortages, and a revival of external demand. However, the consequences of the war, particularly labor shortages and infrastructure damage, will continue to restrain economic growth.