The World Bank predicts a slowdown in Ukraine's economic growth to 2.0% in 2025. The forecast is based on the assumption that the war will last throughout the entire year.
This was reported by the World Bank's January 2025 Global Economic Prospects.
In June of the previous year, the World Bank had forecasted an average GDP growth of 5.8% per year for 2025-2026, assuming that active combat would continue through 2024 and then become moderate.
According to the current estimates of the World Bank, growth in Ukraine will slow to 3.2% in 2024:
"Growth in Ukraine is estimated to have slowed to 3.2 percent in 2024, reflecting challenges such as reduced energy capacity and winter power outages, which constrained trade and industrial output gains. Despite these obstacles and continued attacks on infrastructure, the economy has shown significant resilience. In September, approximately $20 billion of outstanding commercial debt through Eurobonds was restructured, with Eurobond amortization and interest payments expected to fall by $7.6 billion between 2025 and 2027 compared to pre-restructuring obligations. The opening of European Union (EU) accession talks and the Ukraine Plan under the EU financing facility (financial support over the 2024-27 period) serve as significant anchors for EU alignment," states the report.
According to the report Ukraine’s growth is projected to moderate to 2 percent in 2025, assuming active hostilities continue throughout the year.
"A robust recovery of 7 percent is anticipated in 2026, contingent on the cessation of active hostilities, supported by consumption and reconstruction investments. The outlook remains conditional on assumptions about the timing and quantity of external assistance receipts and the duration of Russia’s invasion," states the report.
According to the World Bank, in the last year, the conflict directly affected 41% of Ukraine's population, underscoring the serious human and economic losses. Defense spending amounted to about a third of GDP in 2023.
"Geopolitical tensions continue to pose a critical risk. The invasion of Ukraine remains a significant factor in shaping the regional outlook. Any further escalation could lead to greater economic disruption across the region. Over the past year, the conflict has directly affected 41 percent of Ukraine’s population,1 underscoring the severe human and economic toll. Military expenditures surged across the region, rising to 4 percent of GDP in 2023—double the average for 2010-21. The increase was particularly pronounced in Ukraine, where defense expenditures accounted for about a third of its GDP in 2023, and in Russia," states the report.
The start of negotiations for joining the European Union and the EU funding mechanism plan (financial support for 2024-2027) serve as important pillars for Ukraine's accession to the EU, notes the World Bank.
