Ukraine maintains macroeconomic stability regardless of struggle – EBRD report

• Wartime pressures weigh on progress, however resilience helps modest financial enlargement
• Real GDP progress picks up in second half of 2025 for a whole-year determine of 2.0 per cent
• Growth forecast at 2.5 per cent in 2026 if the struggle continues by way of 2026

Ukraine is sustaining macroeconomic stability regardless of Russia’s struggle on the nation, says the most recent version of a flagship financial report by the European Bank for Reconstruction and Development (EBRD). Real GDP progress, gradual at the beginning of the 12 months, picked up strongly to three.0 per cent by the top of 2025, giving a whole-year determine of two.0 per cent.

The EBRD’s Regional Economic Prospects (REP), revealed right this moment, modifications the belief behind its actual GDP progress forecast for Ukraine in 2026. Assuming the struggle continues all through 2026, the Bank now forecasts that Ukraine’s actual GDP will develop by 2.5 per cent this 12 months, rising to 4.0 per cent in 2027. Its earlier report had assumed a ceasefire and advantages from post-war reconstruction, permitting it to forecast 2026 progress of 5.0 per cent.

“Supporting the country’s macroeconomic stability is significant, secured and largely frontloaded external financing,” the report says. “While the war continues to impose substantial human and economic costs, Ukraine’s authorities, businesses and partners have demonstrated strong capacity to stabilise the economy under unprecedented conditions.”

Economic efficiency in 2025 was formed by main wartime constraints. Power shortages, weaker agricultural output and ongoing labour shortages weighed on progress, whereas Russia’s focused assaults on infrastructure created persistent logistical bottlenecks. The commerce deficit widened as grain exports declined and momentary European Union (EU) commerce preferences ended. Nevertheless, many sectors continued to adapt, reflecting sturdy resilience and the flexibility of corporations to function successfully regardless of disruption.

Real GDP progress remained subdued total in 2025, though momentum picked up late within the 12 months. The economic system expanded by 2.1 per cent year-on-year within the third quarter and three.0 per cent within the fourth quarter, in contrast with 0.8 per cent within the first half.

Inflation, elevated at the beginning of 2025, fell sharply within the second half as tighter financial coverage, easing price pressures and a secure alternate fee took impact. By January 2026, inflation had eased to 7.4 per cent. The central financial institution maintained a restrictive stance all through 2025 earlier than chopping the speed by 50 foundation factors in January 2026.

Fiscal help stays essential. Ukraine’s giant fiscal deficit is absolutely financed by exterior companions, guaranteeing continuity of public companies and defence spending, and contributing to wider macroeconomic stability. Committed exterior financing of greater than €110 billion for 2026-27 is predicted to comprise short-term dangers.

While underneath the baseline situation – the place Russia’s struggle on Ukraine continues all through 2026 – actual GDP progress is projected at 2.5 per cent this 12 months, rising to 4.0 per cent in 2027 if the struggle ends, an early 2026 peace settlement would considerably enhance the outlook. However, energy shortages, labour constraints and weaknesses in agricultural output proceed to pose notable short-term dangers.

The EBRD, Ukraine’s largest institutional investor, has considerably elevated its help in response to the struggle. The Bank has made greater than €9.0 billion obtainable to Ukraine for the reason that full-scale struggle started in February 2022, supporting the true economic system by way of its work on power safety, very important infrastructure, meals safety, commerce and the personal sector.