European Commission Lowers GDP Growth Forecast for Ukraine for 2025–2026

The European Commission has released new assessments of Ukraine’s economic development, downgrading the GDP growth forecast for the next two years. In 2025, according to the updated data, GDP is expected to grow by only 2%, whereas in November of last year, a growth of 2.8% was predicted. The forecast for 2026 has also been revised downward—from the previously expected 5.9% to a projected growth of 4.7%.

This is reported by AgroReview

Main Reasons for the Slowdown in Economic Growth

The European Commission explains the downgrade in the forecast by stating that hostilities continue to exert serious pressure on production capacities and business sentiment in the country. The decline in exports has been caused by a reduction in industrial production, particularly in sectors that are heavily reliant on energy resources. The situation has also been affected by the closure of “Pokrovskugol,” which was a key supplier for the metallurgy sector.

It is also noted that agricultural exports will decrease due to lower stocks, caused by an unsuccessful agricultural campaign in 2024, which suffered from adverse weather conditions.

Impact of Imports and Dynamics of Foreign Trade

“In contrast, high demand for energy resources, coal, and materials related to defense and reconstruction will maintain a high level of imports, leading to a negative contribution of net exports to GDP growth. Thus, exports in 2025 will increase by only 1.8%, while in 2026, they will rise by 11.4%, and import growth will be 5.5% and 6%, respectively.”

The European Commission emphasizes that the demand for energy resources, coal, as well as defense and reconstruction materials, will remain high, resulting in imports exceeding exports. According to the forecast, in 2025, exports will grow by only 1.8%, while imports will increase by 5.5%. In 2026, an acceleration of exports to 11.4% is expected, while imports will rise to 6%.