EBRD worsens Ukraine's 2025 growth forecast to 3.3% from 3.5%

MOSCOW. May 13 (Interfax) - The European Bank for Reconstruction and Development (EBRD) has revised its Ukraine 2025 growth forecast to 3.3% from 3.5% it predicted in February 2025, while maintaining its 2026 forecast at 5% provided that the crisis is over, Ukrainian media reported with reference to the latest edition of the EBRD's Regional Economic Prospects flagship report.

The global trade pressures and the crisis are weighing on economic expectations for 2025, the EBRD said. Ukraine's GDP growth is expected to slow to 3.3 % in 2025, with recent global trade frictions adding additional downside risks to already high uncertainty related to the crisis, it said.

Stable external financing from the EU under the Ukraine Facility and that provided by G7 countries "will fully cover external and fiscal deficits in 2025, underpinning macroeconomic stability. The strong stimulus from public consumption and increasing military purchases from domestic industry are expected to support economic growth," it said.

That said, the EBRD has noted a slowdown in Ukraine's economic growth and accelerating inflation since the middle of 2024 due to the ongoing crisis.

Ukraine's real GDP growth slowed markedly from over 5.0% in the first half of 2024 to around 2.0% in the second half, bringing the overall figure down to 2.9%, the EBRD said. Causes included electricity shortages, weak harvests, and acute labor shortages in the economy, it said.

While the Ukrainian agriculture, energy production, and trade sectors declined, others manifested solid growth despite challenging conditions and the crisis, it said.

As reported, the EBRD had revised its Ukraine GDP forecast for 2025 down to 3.5% from 4.7% in February.

The International Monetary Fund (IMF) later revised its economic growth forecast for Ukraine in 2025 down by 0.5 percentage points to 2%-3%, and the World Bank revised it down to 2% from 6.5%.

The National Bank of Ukraine in April worsened its forecast for Ukraine's economic growth to 3.1% from 3.6% in 2025 and to 3.7% from 4.0% in 2026 compared to its previous macroeconomic forecast in January.