The EU forecasts a 2.9% increase in Ukraineʼs GDP this year

Sofiia Telishevska

The growth of Ukraineʼs economy will slow down to 2.9% this year, with further acceleration to 5.9% in 2025.

This is stated in the macro forecast published on the website of the European Commission.

After a robust economy in 2023, growth will slow in 2024 due to "weak sentiment, further breakdowns in energy infrastructure and labor shortages."

It said the war would continue to dampen sentiment and hamper production capacity, particularly in the energy sector, where 30% to 40% of energy capacity is estimated to have been destroyed by early 2024.

Mobilization, combined with the continued movement of people fleeing war both domestically and abroad, is projected to continue to cause labor shortages and have implications for output.

It is predicted that inflation in Ukraine will decrease to 5.5% in 2024, but will increase to 7.8% in 2025.

The European Commission also forecasts GDP growth in 2024 at the level of 1% in the EU and 0.8% in the euro area. At the same time, in 2025, it is expected that the GDP in the EU will grow to 1.6%, and in the euro zone — to 1.4%.

  • In the updated macro forecast for 2024, the NBU worsened GDP growth from 3.6% to 3%. The problem for economic growth this year will be restrained budget expenditures at the beginning of the year, the blocking of the western border and the destruction of energy facilities. Instead, the stable operation of the sea corridor, favorable weather and an increase in domestic demand will favor GDP growth.