“The Fitch Ratings International Agency is waiting for a slowdown in Ukraine’s economy in 2025 as a war. The rise in prices will exceed 10%. This is reported by the International Fitch Ratings Agency. Extreme economic growth and high inflation is emphasized in the message, the restoration of the Ukrainian economy has slowed: in 2024 real GDP increased by 2.9%. Fitch revised the growth forecast for 2025 toward a decrease in up to 2.5%”, – WRITE ON: ua.news
The Fitch Ratings International Agency is waiting for a slowdown in Ukraine’s economy in 2025 as a war. Price rise will exceed 10%.
About that reports Fitch Ratings International Agency.
Poor economic growth and high inflation
According to the report, the restoration of the Ukrainian economy has slowed: in 2024 real GDP increased by 2.9%. Fitch revised the growth forecast by 2025 to a decrease in up to 2.5% compared to 2.9% in the previous review.
“This is due to the continued labor deficit, the loss of attacks on gas infrastructure and the closure of the Pokrovsky mine through the war,” the publication reads.
The National Bank of Ukraine strengthened monetary policy, raising a key rate by 250 base points from December 2024 to 15.5%. This is due to the increase in inflation to 15.1% in April after the average level of 6.5% in 2024.
“Inflationary pressure is caused by a leakage, increasing electricity tariffs and increasing prices for mobile services. It is expected that the average annual inflation will be 12.3% in 2025 and will decrease to 6.5% in 2026, ”Fitch Rathings predicted.
Significant Foreign Aid in 2025
Agency analysts believe that Ukraine’s needs for financing will be completely covered, and an additional liquidity buffer for the future will be created.
Net external funding is expected at $ 55 billion compared to an average of $ 25 billion a year in 2022-2024. This is due to the early attraction of profit from frozen Russian assets.
The IMF program provides for the formation of foreign exchange reserves at the expense of foreign aid: $ 9.1 billion in 2025 and $ 8.4 billion to cover expected budget deficits in 2026-2027.
According to Fitch, there is high uncertainty with funding after 2025, so in 2026 the volume of internal borrowing will increase.
Budget deficit will remain high
The fiscal deficit of Ukraine decreased to 17.2% of GDP 2024 due to its high budget revenues, despite the slowdown in the economy. Fitch predicts a deficiency increase in up to 19.3% of GDP in 2025.
The high load on costs will be maintained after the end of the war, as Ukraine will probably retain large armed forces. According to the World Bank’s estimate, Ukraine will need $ 524 billion over the next decade, which is about 2.8 times higher than the country’s nominal GDP for 2024.
GDP forecasts
Since the beginning of 2025, international financial organizations and analytical centers have worsened forecasts for growth in Ukraine. The European Commission has worsened GDP growth forecast up to 2.0% of 2.8%.
