Experts from the International Monetary Fund have extended their forecast for the duration of Russia's war against Ukraine until the end of 2025.
In the previous June forecast, the IMF's baseline scenario predicted the war would end by late 2024, while the negative scenario anticipated a conclusion by the end of 2025.
"The war of the Russian Federation in Ukraine continues to inflict economic, social, and humanitarian losses. Attacks on energy infrastructure have caused significant economic damage, and the outlook remains highly uncertain. The war is expected to continue over the next year, creating pressure on rising costs and opening up additional funding needs," states the new report on the IMF's website.
At the same time, experts are confident that Ukraine will be able to maintain basic economic growth during this period.
"According to the views of security and budget planning experts, the program now envisions a gradual conclusion of the war in the last quarter of 2025 in the baseline scenario and by mid-2026 in the negative scenario," the IMF report notes.
According to the Fund's estimates, real GDP recovery will occur more slowly (2.5-3.5% year-on-year, 2-3 percentage points lower than the previous forecast) due to the prolonged war. Inflation is expected to decrease to 7.5% by the end of the year due to easing cost pressures. The current account deficit is anticipated to increase to $27.1 billion (14.3% of GDP) due to persistent import needs, the impact of labor shortages on export production, and a reduction in grants, which will dominate over the favorable effects of stable shipping, private remittances, and debt restructuring.
