“European Commission worsens forecast for Ukraine’s economic growthThe European Commission has lowered its forecast for Ukraine’s GDP growth to 2% in 2025 due to attacks on infrastructure. Inflation is expected to rise to 12.6% due to rising energy prices.”, — write: unn.ua
DetailsAs noted in the European Commission, while Ukraine’s economy continued to show resilience to Russia’s aggressive war, the growth momentum weakened in the second half of 2024 due to increased attacks on critical infrastructure, which led to disruptions in energy supply and increased production costs.
Against the background of the war continuing to put significant pressure on production capacity and business sentiment, growth is projected to slow further to 2.0% in 2025, before rebounding to 4.7% in 2026, as early reconstruction efforts are expected to take hold.
Inflation is projected to rise to 12.6% in 2025 due to a sharp increase in energy and labor costs, and then ease in 2026 as supply-side pressures ease. Persistent spending needs are expected to keep the government deficit high throughout the forecast period.
AdditionIn the fall of 2024, the European Commission predicted Ukraine’s GDP growth at 2.8% in 2025 and 5.9% in 2026.