Ukraine’s GDP is now expected to grow by 3.3% in 2025, according to the latest Regional Economic Prospects report published by the European Bank for Reconstruction and Development (EBRD) on 13 May 2025. This is a downward revision from the February forecast of 3.5%, attributed to global trade pressures and persistent risks linked to Russia’s ongoing invasion.

The EBRD’s forecast for 2026 remains at 5%, assuming a ceasefire and acceleration of post-war reconstruction.

Inflation surges, hryvnia weakens, growth slows

The EBRD noted that Ukraine’s GDP growth slowed significantly in 2024—from over 5.0% in the first half to around 2.0% in the second half—due to Russian attacks on energy infrastructure, weak agricultural yields, and critical labor shortages caused by the war. The year-end figure stood at 2.9%.

Inflation has risen sharply, reaching 14.6% in March 2025, driven by increased electricity costs and high real wage growth. In response, the National Bank of Ukraine has raised the key interest rate by a cumulative 250 basis points since December 2024, reaching 15.5% by early March 2025.

According to the report, the hryvnia, which was unpegged from the US dollar in October 2023, has since lost approximately 10% of its value.

Ukraine considers shifting currency anchor from dollar to euro

War impact lingers, but trade and public spending support economy

The EBRD notes that despite deep challenges, the Ukrainian economy shows signs of resilience. Export volumes began recovering in 2024 after two years of sharp decline, supported by the activation of Ukraine’s Black Sea trade corridor. While sectors such as agriculture, energy production, and trade declined, others continued to grow.

External financing for 2025 is secured through EU Ukraine Facility support and G7-frozen Russian assets, covering fiscal and external gaps. Economic growth is further supported by public consumption and increased defense procurement from domestic industry.