Ukraine’s Economy in 2025: Forecasts from economists and officials

 

The task of forecasting macroeconomic indicators is extremely challenging, given the uncertainty caused by the war. We asked seven leaders of Ukrainian and foreign analytical teams to provide their forecasts.

Key points:

• For the year 2024 both non-governmental and official forecasters expect real GDP to grow by 3-4%. Together with expected prices increase and hryvnia devaluation, it brings the average nominal GDP forecast to USD 189 bn for 2024.
• For 2025 tangible expected 8% devaluation and real GDP increase of 3.5% (median) will allow for nominal GDP almost reaching USD 200 bn (median of USD 198 bn).
• In terms of public finances, in 2025 the consolidated fiscal deficit is expected to decline to USD 38 bn from USD 44 bn in 2024. The total financing need could reach as high as USD 52 billion, slightely down from USD 56 bn last year. It will be covered mainly by EU’s Ukraine Facility, G7’s ERA loan, backed by the proceeds from frozen russian assets and local bonds rollover.
• The current round of forecast has one notable difference: Dragon Capital has developed an optimistic scenario for the ceasefire after 1Q25. If this comes true, the real GDP will skyrocket by 6%, budget gap will be approx. USD 10 bn  lower and economy in general will be doing better.

War assumptions: 100% of analysts assume that the war will last through all of 2025. Also, one analyst assumes two scenarios in 2025: the ongoing war though all 2025 and ceasefire in first quarter of 2025 without signing a settlement agreement.

This event is one of the activities under the Good Governance Fund Project “Economic Hub: Strengthening Macroeconomic Stability Through Robust Public Financial Management”, which is funded by UK International Development. The project delivery partners are Abt Global and Centre for Economic Strategy.