RUS full-scale war is ongoing and keeps having a devastating impact on Ukraine’s economy
However, GDP is back on a growth path since 2023, and is forecast to further grow in 2024 - 2025
Based on a set of assumptions on the war and international aid, IER and GET estimate a GDP growth of 3.6% in 2024 and 3.4% in 2025:
- Demand side: Private consumption and rebuilding investment activities will remain the main drivers in 2024 and 2025
- Supply side: Moderate growth across all main sector: energy destructions and other war-related factors impede the development
Trade deficit is not expected to be offset by primary and secondary incomes, leading to a CA deficit of 10.3% of GDP in 2024 and 12.9% of GDP in 2025
Average inflation is forecast to fall to 5.2% in 2024 and 7.6% in 2025, after 12.8% in 2023
A significant part of the financial aid comes in form of loans, and domestic borrowing is forecast to still play a significant role. Thus, the debt burden is forecast to grow to 96% of GDP in 2024 and to exceed 100% of GDP in 2025 given the assumption of a debt restructuring agreement
However, the forecast is subject to large uncertainty related to further development of the war
