The International Monetary Fund has downgraded its forecast for Ukraine’s economic growth for this year to 1.0-1.6%, down from its 2% estimate in the April World Economic Outlook (WEO) and its late February range of 1.8-2.5% set during the approval of the new four-year Extended Fund Facility (EFF) program.
"GDP growth will slow to 1.0-1.6% in 2026 due to the consequences of Russia’s ongoing war in Ukraine and the impact of the war in the Middle East, while risks remain exceptionally high," according to a Fund press release published on its website on Friday evening regarding a staff-level agreement on the first review of the EFF program.
The IMF noted that macroeconomic stability is generally being maintained, despite the war of Russia and the consequences of the war in the Middle East, thanks to sound macroeconomic policy and substantial external support from Ukraine’s partners.
The Fund added that the National Bank of Ukraine (NBU) maintains an adequate level of international reserves, preserves financial stability, and keeps inflation expectations low despite the shocks.
As reported, the National Bank in April lowered its GDP growth forecast for this year to 1.3% from 1.8%, but left next year’s forecast at 2.8%, and expects acceleration to 3.7% in 2028.
The government forecast embedded in the 2026 state budget currently projects 2.4% growth, but Head of the Ministry of Economy Oleksiy Sobolev recently told Interfax-Ukraine that it is being revised downward, though he did not specify the new figure.
For its part, the EBRD downgraded its forecast for Ukraine’s 2026 GDP growth from 2.5% to 2.2%, while the World Bank lowered it to 1.2%.
