According to the macro forecast published on the website of the European Commission, this year's economic growth of Ukraine will slow down to 2.9%, but will accelerate to 5.9% in 2025. After stabilizing in 2023, growth in the economy will slow in 2024 due to a sharp increase in "weak sentiment, new breakdowns in energy infrastructure and labor shortages."
The forecast also indicates that the war will continue to affect sentiment and limit the country's productive capacity, particularly in the energy sector, where 30% to 40% of energy capacity has been destroyed by early 2024. Mobilization, together with the constant movement of people seeking escape from war, both at home and abroad, is projected to continue to cause labor shortages and have implications for output.
As for inflation, it is projected to ease to 5.5% in 2024, but jump to 7.8% in 2025. The European Commission also forecasts GDP growth in the EU at the level of 1% in 2024 and 0.8% in the euro area. In 2025, GDP in the EU is expected to grow to 1.6%, and in the euro area to 1.4%.
