RUS full-scale war continues having a devasting impact on Ukraine’s economy
Real GDP is on a growth path since 2023, but will not reach its pre-war level in the medium-term
We estimate GDP growth at 3.5% in 2024
We forecast GDP growth at 2.9% in 2025 and 3.2% in 2026
Demand side: Private consumption and rebuilding investment activities will remain the main drivers in 2025 and 2026, but without large-scale reconstructions
Supply side: Moderate growth across all main sector: energy sector destructions and other war-related factors impede the development
Trade deficit is not offset by primary and secondary incomes: current account deficit of 7.1% of GDP in 2024, G7 ERA grants will temporarily cause the CA to balance in 2025, but CA will return to a deficit of 5.7% of GDP in 2026
Average inflation is forecast to remain in double digits in 2025 with 12.5% (aop) but will decelerate to 6.5% in 2026
Budget financing will remain scarce despite ERA. Debt ratio is estimated to have peaked in 2024 (92% of GDP) but will remain large: 89% in 2025 and 85% in 2026.
Forecast remains subject to large uncertainty related to further development of the war
