NBU stops expecting return of Ukrainians home in 2025, expects outflow of 700,000 people in 2024-2025

MOSCOW. Aug 2 (Interfax) - The National Bank of Ukraine (NBU) has downgraded its forecast on migration of Ukrainians; whereas it expected the net outflow of about 200,000 people this year and the inflow of 400,000 people next year, it now estimates this year's outflow at 400,000 people and 300,000 people next year.

"This calculation has worsened compared to April's inflation report in light of the significant destruction of the Ukrainian energy system, which is accompanied by long-term electricity shutdowns and increases risks for the heating season," Ukrainian media outlets quoted the NBU's latest inflation report published on Friday as saying.

Besides household difficulties, frequent shutdowns negatively impact production processes, which reduces the economic activity and the demand for labor, further incentivizing migration, the NBU said.

In absolute terms, the number of Ukrainian migrants remaining abroad could increase to 6.7 million people this year and 7 million people in the next one. The NBU also cites the United Nations' data, according to which the number of migrants from Ukraine abroad increased by 240,000 people, reaching 6.6 million, in the first half of this year.

In its new report, the NBU moved the expected start of Ukrainians' return home to 2026 from 2025. According to its forecast, 200,000 Ukrainians could return home in the first quarter of 2026 and the same number before the end of year, although the previous inflation report in April estimated the net inflow in 2026 at 800,000 people.

Therefore, the NBU now estimates the amount of Ukrainian migrants abroad by the end of 2026 at 6.6 million people compared to 5.3 million people in April's report.

The NBU explained the change in its forecast, in addition to the worsening of the living conditions in Ukraine, by Ukrainians' better adjustment abroad due to their longer stay there.

The report also pointed out that the quantity of internally displaced persons will also remain significant, because, according to poll results, a considerable amount of them have nothing to return to because the residential infrastructure was seriously damaged.

"Downside risks of an even further outflow of migrants abroad and their fewer and later returns are currently prevailing. Legislative decisions of the governments of the receiving countries to deepen Ukrainian migrants' integration into the countries of their stay and their children into educational systems of the countries of their stays and, therefore, an increase of the inclination towards families' reunions abroad could become considerable factors of it," the NBU said.

It will have a negative impact on labor supply and consumer demand and deter the growth of Ukraine's economy, the NBU said.

"Significant changes in the structure of the economy and an increase in demand for qualified workforce [in Ukraine] will result in the further increase of imbalances on the labor market, which is to stimulate the growth of wages higher than the growth of productivity in certain sectors," the NBU said.

On the other hand, the restoration of housing and infrastructure and the increase in number of jobs thanks to the excepted recovery of the economy may lead to a more active return of migrants, it said.