EBRD joins the World Bank and National Bank in slashing forecasts as the reconstruction economy hits structural limits, threatening reconstruction timelines.
The European Bank for Reconstruction and Development cut Ukraine’s 2025 growth forecast to 2.5% from 3.3% on 25 September. With this, Ukraine’s largest institutional investors agree on a harsh reality: the war economy has hit a ceiling.
This matters beyond Ukrainian borders. EBRD aligns with the World Bank’s 2% forecast and Ukraine’s National Bank’s 2.1% projection—a consensus that forces Western allies to recalculate reconstruction timelines, aid effectiveness, and the sustainability of current support levels.
The economy reaches its limits
EBRD announced the downgrade by stating that three constraints limit growth regardless of aid volumes. Labor shortages persist as mobilization and emigration reduce the workforce, even as unemployment rose to 15.3% in August 2025 from a wartime low of 11.2% in July, according to the Center for Economic Strategy. This creates hiring difficulties despite higher unemployment.
Russian attacks against the energy infrastructure force expensive electricity imports and disrupt production.
Weak agricultural exports add to the problems, with Ukraine exporting 1.6 times less grain than last year—a decline of 3.8 million tons as production centers face ongoing strikes.
Ukraine’s current account deficit widened almost 50% from January to July, reflecting high military and energy imports and a weak export performance.
What this means for Western planning
These similar forecasts force uncomfortable questions about aid effectiveness and reconstruction timelines that Western capitals are now calculating.
Ukraine will receive approximately $40 billion in external financing for 2025, including funds from frozen Russian assets—yet growth expectations keep dropping.
This suggests that while preventing collapse, current aid levels cannot unlock the higher growth rates.
The 2026 forecast remains at 5% growth, but EBRD explicitly conditions this on “assuming a ceasefire and benefits from post-war reconstruction.”
Translation: without security improvements, Ukraine remains trapped in a 2-3% growth ceiling regardless of Western support levels.
The strategic implications
For Western allies, this agreement reveals the limits of aid-dependent stability. The construction sector is doing well on reconstruction demand, while export industries have severe difficulties—creating exactly the aid dependency that donors fear.
Multiple forecasters now predict 2-2.5% growth, suggesting Ukraine needs security improvements, not just more money, to achieve stability. This affects everything from the EU membership timelines to reconstruction bond planning and long-term Western commitment strategies.