In the second quarter of 2025, the growth rate of Ukraine’s economy slowed to 0.7% year-on-year. According to the National Bank, this is primarily due to seasonal factors and adverse weather conditions that delayed crop maturation.
This is reported by Finway
Factors Influencing Economic Dynamics
Among the main reasons for the restraint on economic recovery, the National Bank cites the consequences of the full-scale war: loss of population, territory, production capacities, and infrastructure. At the same time, private consumption by households has become the main factor supporting economic growth. In the second quarter of 2025, final consumer spending by households increased by 9% year-on-year, significantly exceeding the first quarter’s figure (1.6%).
“The actual growth rate of real GDP turned out to be lower than the estimate by the National Bank, published in the Inflation Report for July 2025 (1.1% year-on-year), primarily due to a more significant impact of adverse weather conditions on the timing of crop maturation,” the National Bank explained.
Forecast for the Second Half of the Year
The National Bank forecasts that economic recovery will continue in the second half of 2025. This development will be supported by the activation of harvest collection, stable domestic demand, and increased fiscal incentives due to the expansion of government budget expenditures. However, intensified shelling of infrastructure and a deteriorating security situation may restrain further economic growth.