IMF projects Ukraine's real GDP growth at 1.8%-2.5% in 2026

MOSCOW. Feb 27 (Interfax) - Real GDP growth in Ukraine is expected to stand at 1.8%-2.5% in 2026 versus 1.8%-2.2% in 2025, the International Monetary Fund (IMF) said in its new four-year arrangement under the Extended Fund Facility (EFF) for Ukraine.

Inflation in Ukraine is expected to decelerate to 7.5% in 2026 from 8% in 2025, the unemployment rate will go down to 10.2% from 11.6%, and nominal wage growth will slow to 12% from 22.6% in 2025, Ukrainian media reported, citing the IMF's forecast.

The IMF also expects budget revenues, expressed as a percent of GDP, to decrease to 43.8% in 2026 from 51.2% in 2025, budget expenditures to decline to 62.2% from 74.5%, and the budget deficit to decrease to 19.3% of GDP from 23.6% of GDP.

According to the IMF forecast, public debt is expected to grow from 108.7% of GDP to 122.6% of GDP. It stood at 89.7% of GDP at the beginning of 2025, and at 77.7% of GDP at the end of 2022. The IMF expects Ukraine's current account deficit to expand to 19.1% of GDP in 2026 from 15% of GDP in 2025 and 8% of GDP in 2024.

Meanwhile, considerable external financial assistance should help bring Ukraine's international reserves to $65.5 billion in 2026 from $57.3 billion in 2025, $43.8 billion at the end of 2024, and $28.5 billion at the end of 2022, while foreign direct investment will grow insignificantly - to $1.6 billion in 2026 from $1.1 billion in 2025.

The IMF also expects broad money growth to slow to 11% in 2026 from 12.7% in 2025 and lending to the non-government sector to decline to 13.4% from 22.5%.

At the end of January, the National Bank of Ukraine (NBU) lowered its estimate of GDP growth in 2025 from 1.9% to 1.8% and cut its forecast for 2026 to 1.8% from 2%, citing the deterioration of the situation in the country's energy sector.

The NBU also worsened its inflation forecast for 2026 to 7.5% from 6.6%, and to 6% from 5% for 2027.