Economic forecasts for Ukraine revised slightly downward

Forecasters at the National Bank of Ukraine reduced their 2025 prognosis in April to 3.1 % (down from 3.6 % in the January forecast). The main reasons for the downgraded growth outlook were lack of available labour, destruction of the country’s natural gas infrastructure at the start of this year and weaker prospects for the global economy. The NBU expects growth to reach 3.7–3.9 % in coming years as reconstruction efforts progress and consumer demand remains strong.

The IMF’s most recent World Economic Outlook (WEO), published in April, expects Ukraine’s GDP growth to slow to 2 % this year. Assuming a coo-down in the war, the WEO sees Ukraine’s annual economic growth in 2026 and 2027 rebounding to a range of 4.5–4.8 %. The IMF view of the causes of economic slowing are the same as those cited by the NBU – destruction of the country’s natural gas transmission infrastructure, burgeoning labour shortages and poor outlooks for certain branches, particularly production and export of steel. The advance of Russian troops in January forced the closure of the giant Pokrovsky coal mine west of the city of Donetsk. The cessation of coal production will inevitably reduce steel production this year as the mine is the main source of coal for Ukraine’s wartime steel industry.

The IMF expects Ukrainian economic growth to slow this year

Note: IMF forecasts for 2025–2027.
Sources: Ukrstat, IMF, BOFIT.