NBU slashes Ukraine’s 2025 GDP forecast to 2.1%

On Thursday, July 24, the National Bank of Ukraine (NBU) published an updated macroeconomic forecast, which is significantly more pessimistic than the one released in April.

The central bank now expects real GDP to grow by just 2.1% in 2025, down from the previous projection of 3.1%.

"The revised outlook reflects a number of challenges: the security situation, destruction of industrial facilities, infrastructure and housing, persistent inflationary pressures that are expected to continue into this year and the next, a strained labor market, and adverse weather conditions that have negatively impacted crop forecasts," said NBU Governor Andriy Pyshnyy.

The pace of recovery will largely depend on the course of the war. The NBU’s baseline scenario assumes a gradual normalization of conditions, with GDP growth of 2–3% in 2026–2027.

If the situation stabilizes, private consumption and investment are expected to pick up significantly, helping to offset the effects of fiscal consolidation. Under such a scenario, GDP growth could reach 3–3.5%.

The inflation outlook has also worsened: the central bank now expects to reach the 5% inflation target only in 2027, later than previously forecast.

• Although Ukraine avoided a recession at the beginning of 2025, real GDP grew by just 0.9% in the first quarter, indicating weak momentum.
• The International Monetary Fund (IMF) has warned that Ukraine’s economy could contract in 2025, depending on how the war and external conditions evolve.