The European Bank for Reconstruction and Development (EBRD) has revised its forecast for Ukraine's real GDP growth in 2025 to 3.3% from the previously expected 3.5% in February, and has kept the 2026 forecast at 5.0%, assuming the cessation of Russia’s war against Ukraine and the benefits of post-war reconstruction.
"Global trade pressure, along with the war, are impacting economic expectations for 2025. Ukraine's GDP growth is expected to slow to 3.3% in 2025, with recent global trade disputes adding additional risks to the already high uncertainty caused by Russia's war against the country," according to the latest edition of the EBRD’s flagship economic report, "EBRD Regional Economic Prospects," released on Tuesday.
It is noted that stable external financing from the EU under the Ukraine Facility programme and funds from frozen Russian assets (ERA), provided by G7 countries, will fully cover external and fiscal deficits in 2025, supporting macroeconomic stability. Strong government consumption and increased military procurement from domestic industry are expected to support economic growth.
At the same time, the bank observed that since mid-2024, there has been a slowdown in economic growth and an acceleration in inflation due to the impact of the war, which began with the Russian invasion in February 2022.
The EBRD also reminded that real GDP growth in 2024 significantly slowed from over 5.0% in the first half of the year to around 2.0% in the second half, bringing the total rate down to 2.9%. Reasons for this include electricity shortages due to Russian attacks, poor harvests, and a severe labor shortage in the economy caused by war-related needs.
"While agriculture, energy production, and trade shrank, other sectors showed resilience and growth despite difficult conditions and the war. Business demonstrated resilience and adaptability, which, combined with a surge in 2024 in Ukraine’s Black Sea trade corridor, led to a recovery in exports after two years of sharp decline," the bank added.
The report also mentions that in the EBRD’s regions of operation—Central and Eastern Europe, Central Asia, and the Southern and Eastern Mediterranean (SEMED)—average growth rates slowed from 3.4% in 2022 to 2.7% in 2023 and remained generally stable at 2.8% in 2024.
"However, a sharp rise in uncertainty in trade and economic policy in 2025, driven by heightened global political uncertainty, a weakening of external demand, and both direct and indirect effects of the announced increase in import tariffs, prompted the EBRD to lower its regional May forecast for this year by 0.2 percentage points to an average of 3%, before raising it to 3.4% in 2026, unchanged from the February forecast," the publication states.
In February, the EBRD downgraded Ukraine’s GDP forecast for this year from 4.7% to 3.5%.
