Economic Monitor

Ukraine’s economy grew by 3.5% in 2024, driven by domestic demand but constrained by destructions in the energy sector. In 2025, 2026 economic growth is projected to reach 2.9% and 3.2%. Private consumption and investment will be key drivers. However, export growth will remain constrained, while imports are expected to expand. Nevertheless, the current account is projected to remain balanced in 2025, supported by the planned USD 50 bn financing under the G7 Extraordinary Revenue Acceleration Loans (ERA) initiative, before returning to a deficit in 2026. Inflation is forecast to remain in double digits on average in 2025. However, in 2026, with an improved agricultural harvest and a slowdown in energy price growth, inflation is expected to approach the National Bank’s target range.

Kosovo’s economy is projected to grow by 3.8% in 2024, driven by private consumption and public investment. Inflation is down to 2.2% (July 2024), with competitive wages at an average of 570 EUR. The current account deficit fell to 7.7% of GDP, with remittances remaining crucial at nearly 14% of GDP. Foreign direct investment reached a record 8.8% of GDP in 2023, but further diversification is needed. The draft National Energy and Climate Plan highlights Kosovo’s ambitious energy and climate goals.

The Ukrainian economy will continue to grow, but at a slower pace: 5.3% in 2023, 3.6% in 2024 and 3.4% in 2025. Consumption and investment are driving growth, but are being held back by damage to energy infrastructure and military mobilisation. Inflation is rising and the current account deficit is widening. The fiscal situation remains tight, with high public debt and insufficient international aid. The energy sector is severely damaged, leading to supply shortages and possible blackouts.

Kazakhstan’s economy grew by 5.1% in 2023, driven by investments, though a slowdown to 3.5% is expected in 2024 due to maintenance of key oil fields. Inflation dropped to 8.4% by August 2024, supported by lower food and commodity prices. Despite inflation, the Tenge appreciated against the dollar, and international reserves remain high. The current account deficit reflects a reliance on oil prices.

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