The International Monetary Fund (IMF) has downgraded its 2025 economic growth forecast for Ukraine, lowering it by 0.5% to 2-3% of GDP. This comes against the backdrop of a protracted military conflict, damaged energy infrastructure, and labor market restrictions that are negatively impacting the country's economic development.
According to the Fund's press release, real GDP growth is expected to be 3.5% in 2024. However, in 2025, economic growth will slow to 2-3%, which is the result of adverse factors, in particular, the continuation of the war with Russia.
The downgrade in economic growth forecasts is not limited to the IMF. The European Bank for Reconstruction and Development (EBRD) also recently revised its forecast for 2025 down to 3.5% from the previous 4.7%. This indicates a general weakening of economic activity in Ukraine.
In addition, the World Bank in its January report also lowered its GDP growth forecast for 2025 to 2% from the previous 6.5%. However, the bank raised its forecast for 2026 to 7%, indicating the possibility of economic recovery in the longer term.
The forecasts of the National Bank of Ukraine have also undergone changes: given the security risks and the difficult situation on the labor market, the NBU reduced the forecast for real GDP growth for 2025 from 4.1% to 3.6%. At the same time, the 2025 state budget is based on a GDP growth forecast of 2.7%.
The situation in the Ukrainian labor market and energy sector, as well as external economic factors, continue to be important challenges to the country's economic recovery in the context of war.
