Economic Monitor Ukraine
The Ukrainian economy grew by 3.5% in 2024, driven by domestic demand but impacted by the destruction of the energy sector. Growth of 2.9% and 3.2% is forecasted for 2025 and 2026 respectively, with private consumption and investment set to be the key growth drivers.
WA 21 | March 2025
Overview
- Ukraine’s economic growth will moderate to 2.9% in 2025, after 3.5% in 2024
- Consumption and investment are the main drivers, war damages and labour shortage are brakes
- Rising inflation expected to peak in mid-2025, target to be reached only in 2026
- New USD 50 bn ERA funds will balance the CA in 2025, but return to deficit in 2026
- Controlled depreciation allows building up FX reserves
- Budget deficit financing remains challenging.International financial aid to be partly used for military equipment purchases
- Public debtto peak in 2024, and is expected to decline during 2025/2026
- New Black Sea corridor positively affects exports, but imports continue to grow stronger
Special issues
- Reconstruction needs: Total sum of USD 524 bn; immediatereconstruction needs lack financing
- Situation in the energy sector challenging: while blackouts were limited so far, prices increased
- International support tracker: Allocations by US and EU now roughly on the same level
