Ukraine's GDP growth in 2026 will amount to 2.1%, rather than the previously projected 2.8%. In 2027, economic growth may accelerate to 2.6%, though even under this scenario, real GDP will remain approximately 17% lower than pre-war levels. The reason is the prolonged destructive impact of Russia's full-scale war against Ukraine. This forecast was released by Berlin Economics and the Institute for Economic Research and Policy Consulting (IER) within the framework of the German Economic Team (GET) project.
Main Macroeconomic Forecasts
According to expert estimates, Ukraine's real GDP growth in 2025 was 1.9%—slightly less than the expected 2%. A gradual acceleration of the economy is expected thereafter: growth of 2.1% in 2026 and 2.6% in 2027, provided the intensity of hostilities decreases starting from mid-year. Economic development continues to depend on the intensity of the war, infrastructure damage, and the volume of international aid.
Growth Drivers and Key Challenges
Private consumption remains the main driver of growth, supported by an increase in real wages amid labor shortages. Wages continue to rise due to labor market deficits and partially as a result of "de-shadowing," as companies increase official payments to qualify for employee reservations. Investment activity is also strengthening: gross fixed capital formation will grow by 9.4% in 2026 after a 17.7% jump in 2025, primarily in the defense sector.
Inflation and Foreign Trade
After inflation peaks at 15.9% in May 2025, the average annual rate will slow to 6.1% in 2026 and enter the target range (5.7%) in 2027. Lower oil prices will act as a restraining factor, though this effect may be partially offset by expected increases in tariffs for heating, electricity, and natural gas. The current account deficit in 2026 will rise sharply to $47.3 billion, or 20.8% of GDP, due to weak export dynamics and consistently high demand for imports, including energy equipment and defense products.
Sectoral Overview
In agriculture, harvests are expected to grow within the medium-term trend, while livestock farming will gradually recover. Industry will receive support from domestic demand, export diversification, and stable defense contracts, ensuring moderate growth in 2026 and 2027. In the energy sector, the consequences of infrastructure damage and repair costs will remain significant, while the use of generators and the development of distributed generation will support system resilience. Internal trade will grow due to recovering consumer demand, and the transport sector will begin to recover after a 2025 slump thanks to increased shipments.
Public Finance and International Aid
The fiscal situation remains tense, as the ERA buffer will only suffice for budget needs in the first quarter of 2026. The aggregate budget deficit in 2026-2027 could reach $91 billion. If EU financing is accounted for as a loan, public debt will exceed 100% in 2026. Ukraine will continue to depend critically on external support, with an expected new four-year IMF program of $8.1 billion alongside financing via ERA and the Ukraine Facility.
Risks
The forecast is accompanied by high uncertainty, with key risks including further destruction of infrastructure and energy systems, delays in international aid, damage to grain export capacities, and a deepening labor shortage. A positive scenario is possible in the event of faster de-occupation of territories, improved security, and the launch of large-scale reconstruction programs.
Media Inquiries: Olena Shkarpova, shkarpova@ier.kyiv.ua
