Ukraine’s economy has slowed due to setbacks in the energy sector, but there is potential for growth, says Novak
31 March 14:49
The slowdown in Ukraine’s economic growth in 2025 is directly linked to the war and attacks on critical infrastructure. At the same time, even the current result—1.8% annual growth—can be considered positive for a country at war. Economist Andriy Novak discussed this in an interview with the YouTube channel "Komersant Ukrainian".
“Right now, aside from the war, nothing is stopping the growth of the Ukrainian economy. And the fact that we saw at least some growth last year is already a very good result for a country where a major war is ongoing. Yes, it’s lower than the previous year, but the very fact of growth is a positive,” Novak noted.
The economist explains that the key factor slowing down the growth of the domestic economy is Russia’s systematic attacks on the energy and logistics sectors. These attacks directly impact production, business operations, and overall economic activity.
According to him, any disruptions in the power supply immediately hit industry and the agricultural sector, as enterprises are forced to either shut down or operate at reduced capacity.
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Logistics problems add to the strain—damage to transportation infrastructure, particularly railways, leads to delays and reduced freight volumes.
“When there is no stable energy supply, enterprises shut down. When there are logistics problems, products don’t reach their destination. All of this negatively impacts production and, consequently, GDP. Therefore, the war is currently a decisive factor and will remain so until it ends,” he explained.
We should add that, according to the State Statistics Service, Ukraine’s real gross domestic product (GDP) growth in 2025 slowed to 1.8% from 3.2% in 2024.
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