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Euromaidanpress
Euromaidan Press
22 Dec 2024
Maria Tril


International Monetary Fund predicts end of Russo-Ukraine war in late 2025 or in 2026

The International Monetary Fund projects Ukraine will require up to $177.2 billion in external financing under its downside war scenario through 2026.
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A still from the film Armed with Song, a Ukrainian-American documentary by Ryan Smith, which in the original has the iconic title Soldiers of Song.
International Monetary Fund predicts end of Russo-Ukraine war in late 2025 or in 2026

The International Monetary Fund released new economic scenarios for Ukraine in its sixth review under the Extended Fund Facility.

The report projects the war’s end in late 2025 under its baseline forecast, with a possible extension to mid-2026 in a downside scenario.

According to the report, Ukraine’s economy has shown resilience. The real GDP growth reached 4% year-over-year in 2024, marking a one percentage point increase from the previous review.

The Fund reported that winter’s impact on the economy may be less severe than initially anticipated, crediting this to increased business investments in power generation, enhanced import capabilities from Europe, and ongoing infrastructure repairs.

However, according to the report, inflation concerns persist. The IMF revising its forecast upward to 10% by year-end. This adjustment primarily reflects mounting pressure from accelerating raw food prices affecting basic commodities, combined with the effects of previous currency depreciation, wage growth, and energy costs.

Looking ahead to 2025, the IMF maintains its real GDP growth projections at 2.5-3.5%. This outlook factors in potential benefits from accelerated energy capacity repairs in 2024 and new capacity introduction in 2025, though these gains are expected to be tempered by an increasingly tight labor market.

The IMF’s downside scenario paints a more challenging picture for Ukraine, outlining more severe economic difficulties.

Under this projection, the country would face shocks to economic activity, fiscal needs, and balance of payments compared to the baseline scenario. The total external financing gap would expand significantly to $177.2 billion, up from $148 billion in the baseline forecast.

The report said that Ukraine stands at what the Fund terms “a critical juncture” while facing “conditions of exceptionally high uncertainty” as Russia’s war continues.

The IMF’s assessment is stark, noting that “the social, humanitarian, and economic costs remain staggering and have only risen further.”

In its fifth review of Ukraine’s Extended Fund Facility on October 18, 2024, the IMF approved about USD 1.1 billion in support, bringing total aid to around USD 8.7 billion.

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