““To finance defense costs of 25% of GDP requires a very large budget deficit” is said in review”, – WRITE: www.radiosvoboda.org
According to the organization, Russian aggression has led to the movement within and abroad of Ukraine about a quarter of the population, as well as destroyed housing and infrastructure worth about 2.5% of the country’s GDP.
“After the initial shock, the economy gradually adapted through effective political measures and significant external support. However, the situation with safety, labor shortages continue to interfere with the level of movement, unemployment and poverty remain high. Although various strategies and constant reforms are being implemented, a consistent political base is required to create stable institutions for a strong market economy, ”the document reads.
According to the organization, the budget deficit of Ukraine will increase to 20% of GDP of this and next year, mainly because of the needs of defense expenditures:
“A very large budget deficit is required to finance defense costs of 25% of GDP. The budget deficit is expected to be about 20% of GDP in 2025 and 2026, which will lead to a state and state -guaranteed debt up to 120% of GDP in 2026 compared to 50% of GDP in 2021. ”
For economic growth, the OECD recommends, among other things, the creation of conditions for the reintegration of demobilized servicemen and displaced persons into the labor market, the promotion of refugee returning and increasing the participation of women. In particular, it is about lifting restrictions on women in some positions at night.
Among other recommendations:
- Strengthening the rule of law to improve business conditions
- reliable and transparent financial management
- monetary policy aimed at restraining inflation and, “just allowed conditions”, restriction of budget deficits within medium -term goals
OECD estimates that recovery will require “deeper changes in Ukraine’s approach to creating politicians to stimulate economic decisions that support productivity.” According to the organization, the growth rate will remain modest until the war continues, and the private sector will have a central role in Ukraine’s reconstruction.
“The full use of the private sector potential involves increasing private investment, increased productivity and export development. The achievement of these goals will require the solution of ancient structural problems, many of which have intensified the full -scale invasion of Russia. Key priorities include strengthening the regulatory framework, promoting competition and innovation, as well as improving access to funding to attract both domestic and international investments, ”analysts said.
By Data by the Ministry of Energy In February 2025, Russia has inflicted more than 30 massive complexes in objects in three years of a full -scale invasion of three years energy infrastructure of Ukrainethe total losses of which are billions of dollars.
