Economic Monitor Ukraine
Growth of 2.1% and 2.6% is expected for 2026 and 2027, respectively, driven by private consumption and investment. Inflation is rising again due to the effects of the Iran conflict, prompting the continuation of restrictive monetary policy. The current account deficit is set to increase sharply to 21% of GDP in 2026 due to rising imports. A new EU support loan is crucial for covering the budget gap and safeguarding external stability.
WA 23 | April 2026
Overview
- Economic recovery constrained as long asthe war continues: +2.1% 2026, +2.6% 2027
- Growth driven by private consumption and investment, negative contribution from net exports; sectoral outputs in agriculture, industry, transport with limited recovery
- Inflation again rising driven by implications of the Iran conflict , restrictive monetary policy to be continued
- Current account deficit to rise sharply to 21% of GDP in 2026 as exports stagnate while imports continue to grow, external financing essential for external stability
- New EU Support Loan key to cover budget (and external) gap, meeting reform conditionalities would open updisbursements
- Debt-to-GDP ratio above 100%, but mainly at concessional terms from foreign lenders
Special issues
- Reform proposals for simplified tax system: Adjusting threshold for VAT is key
- CBAM: Strong negative impact on UKR exports to the EUcreates challenges
- Biomethane: Exports with potential to rise, but EU market access challenges remain
