Ukraine’s GDP will grow by 2.1%: is this NBU forecast reliable?
1 August 2025 14:24
The National Bank has downgraded its forecast for Ukraine’s GDP growth in 2025 to 2.1%. This is stated in the NBU’ s inflation report for July, "Komersant Ukrainian" reports.
Such a modest pace of economic recovery is due to the effects of the war, bad weather, and negative migration trends, the National Bank says:
“The pace of economic growth remained restrained due to the increased intensity of shelling and further destruction of production facilities, infrastructure and housing.”
The NBU notes that fiscal stimulus funded by international assistance continued to support the economy in the first half of the year. However, the harvest was delayed due to unfavorable weather conditions, and a decrease in food supply limited the activity of the food industry and transportation.
The situation on the labor market also failed to stabilize, with migration and mobilization pressures keeping the labor market tense.
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NBU forecast for the coming years
The NBU forecasts the following GDP growth in the future:
- 2026 – GDP growth by 2-3%;
- in2027, the recovery may accelerate to 3-3.5% if the security situation normalizes more quickly and private investment increases.
The NBU’s forecasts are about flexibility
The National Bank of Ukraine is quite flexible in its forecasts, as the uncertainty of geopolitical, macroeconomic, military and other situations creates a fairly wide forecasting field. Therefore, the NBU responds quickly enough to macroeconomic changes in the country and regularly adjusts its forecasts.
For example, last fall, the NBU expected inflation to start slowing down this spring. Then the inflation slowdown was postponed to the summer. The NBU also forecast inflation at 6.9% in 2025; in spring 2025, this forecast was adjusted to 8.7%, and now it is 9.7%. This spring, they had hoped to return to the 5% inflation target in 2026, and now they are hoping to return to it in 2027.
Since inflation has not been falling as predicted by the National Bank, the predicted and even promised reduction in the key policy rate has not happened. Earlier, the NBU promised to cut it to 14% in the second half of 2025, but now it turns out that it will remain unchanged.
In addition, according to the NBU’s forecast, Ukraine’s GDP was expected to grow by 3.1% in 2025. Judging by this forecast dynamics, it can be assumed that the current forecast of 2.1% GDP growth will also not be entirely accurate.
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