NBU downgrades Ukraine's GDP growth forecast to 3.1% in 2025, 3.7% in 2026

MOSCOW. April 17 (Interfax) - The National Bank of Ukraine (NBU) has downgraded its forecast for Ukraine's economic growth this year to 3.1% from 3.6% in its previous January macroeconomic forecast, from 4.0% to 3.7% next year and from 4.2% to 3.9% in 2027.

"The escalation of trade confrontation globally has not yet affected the Ukrainian economy, but will further hamper its recovery. Tariff wars are likely to result in a certain weakening of external demand for certain items of Ukrainian exports, although agricultural products will remain in demand even as the global economy cools," Ukrainian media reported, quoting the NBU's press statement as saying on Thursday.

The gross domestic product (GDP) growth remained restrained in the first quarter of 2025, in particular, due to the damaged gas infrastructure and the resulting increased demand for gas imports, it said. Despite some invigoration on the labor market, the crisis-driven shortage of skilled employees also remained a major constraint, as business surveys indicated.

The NBU said that a 3.1% GDP growth in 2025 will be pushed up by higher harvests and lower electricity shortages, which, with substantial defense orders, will be supporting the industry.

The regulator added that GDP growth will also be supported by increased investment, a recovery in manufacturing and resilient consumer demand.

"Private investment and consumption will offset the effects of fiscal consolidation, which will take place against the backdrop of declining international financial assistance," the statement said.

Ukrainian First Deputy Prime Minister and Economy Minister Yulia Sviridenko said on March 18 that the GDP growth for January-February 2025 is estimated at 1.1%.

The International Monetary Fund (IMF) earlier, on February 28, downgraded Ukraine's economic growth forecast for 2025, reducing it by 0.5 percentage points compared to the previous forecast to 2%-3%. The European Bank for Reconstruction and Development (EBRD) has also downgraded its forecasts for Ukrainian GDP growth in 2025 from 4.7% to 3.5%, the World Bank from 6.5% to 2%, and the NBU from 4.1% to 3.6%, while the 2025 state budget is based on a 2.7% GDP growth forecast.

Furthermore, the ICU investment group lowered its forecast for Ukraine's GDP growth from 3.4% to 3% in 2025.