“Escalation of trade wars will “restrain recovery”: NBU has worsened GDP growth forecast for 2025 to 3.1%The National Bank has worsened its GDP growth forecast to 3.1% due to the consequences of the war and trade confrontations. The economy is expected to grow in 2025 due to increased harvests.”, — write: unn.ua
In the first quarter of 2025, economic growth remained restrained, in particular due to the destruction of gas infrastructure and the resulting increase in gas import needs. Despite some revival of the labor market, a significant deterrent, according to business surveys, was also the war-related shortage of qualified workers
The National Bank reports that the aggravation of trade confrontations in the world has not yet affected the Ukrainian economy.
The aggravation of trade confrontations in the world has not yet affected the Ukrainian economy, but will further restrain its recovery. Tariff wars are likely to lead to some weakening of external demand for certain Ukrainian exports, although agricultural products will remain in demand even in a cooling global economy
Taking into account these factors, the NBU slightly worsened its estimates of the dynamics of economic recovery.
It is expected that in 2025 the Ukrainian economy will grow by 3.1%. This will be facilitated, in particular, by an increase in harvests and a decrease in the electricity deficit, which, together with significant defense orders, will support industry
“In 2026, 2027, real GDP growth will accelerate to 3.7-3.9%, primarily due to increased investment in reconstruction, restoration of production and sustainability of consumer demand. Private investment and consumption will compensate for the effects of fiscal consolidation, which will take place against the background of decreasing international financial assistance,” the statement reads.
NBU left the discount rate at 15.5%: expects support for the foreign exchange market from this17.04.25, 14:04 • 12476 views
At the same time, it is noted that after significant receipts this year, foreign financial assistance will decrease in the following years, but it will be enough for non-emission financing of the budget deficit and maintaining the stability of the foreign exchange market.
“This year, Ukraine may receive larger volumes of international financial assistance than previously expected due to faster transfers of tranches under the ERA mechanism. These funds will be enough not only to finance this year’s budget deficit, but also to form a reserve for public finances for next year, when the volume of external assistance is likely to start to decrease,” the NBU informs.
It is reported that significant receipts this year will also allow Ukraine to increase its international reserves to 58 billion US dollars in 2025, maintain them at a high level in the following years and, accordingly, maintain the stability of the foreign exchange market. The latter, together with interest rate policy measures, is expected to further keep inflation expectations under control and gradually reduce inflation to the target of 5% in the policy horizon.