The European Bank for Reconstruction and Development (EBRD) has downgraded its forecast for Ukraine's real GDP growth to 1.5% for 2026 and 2.5% for 2027 due to Russian strikes on Black Sea ports and vessels, whereas in early June of this year, it had projected growth of 2.2% and 4%, respectively.
"Ukraine's macroeconomic outlook has weakened materially, with the economy shifting from slow recovery to near stagnation amid an escalation in Russian air attacks," according to the EBRD's Regional Economic Prospects (REP) report published on Thursday.
According to the report, downside risks are stemming from any prolonged disruption to Black Sea shipping, renewed Russian attacks on energy infrastructure and wider external financing gaps.
Real GDP contracted by 0.6% year on year in the first quarter of 2026, the EBRD said. As for the second quarter, it cites preliminary data from Ukraine's State Statistics Service indicating GDP growth of 0.6%, although the Service has since revised its estimate downward to 0.4%.
"While defence production, public spending and resilient services supported activity, damaged energy infrastructure, labour shortages, weak confidence and renewed logistics bottlenecks constrained growth," the EBRD said.
The bank added that inflation accelerated to 7.7% in July, reflecting higher fuel and energy costs, exchange-rate pass-through, labour-market pressures and wider supply disruptions, prompting the central bank to raise the policy rate to 15.5% (based on August results, inflation rose to 8.1%, while the National Bank raised the key policy rate to 16%).
The goods trade deficit widened sharply as energy and defence imports increased, while export capacity was hit by renewed Russian attacks on Black Sea ports, civilian shipping and transport infrastructure, the EBRD said.
"Alternative land and river routes can mitigate, but not replace, the lost deep-sea shipping capacity, while low Danube water levels, strikes on Danube infrastructure and rolling-stock shortages add further constraints," the bank said.
The EBRD said that Ukraine held more gas in storage in mid-2026 than at any point since 2022.
As for the impact on the global markets, the EBRD said that Russia and Ukraine together account for about a quarter of world wheat exports. A prolonged disruption to exports may significantly raise food prices and intensify inflationary pressures.
"Rerouting grain by land or rivers is expensive and logistically challenging. Low water levels in the Danube have also limited the main alternative route for Ukraine's exports," the bank said.
As reported, due to destruction in the industrial and trade sectors and deteriorating business expectations, the National Bank of Ukraine (NBU) has lowered its real GDP growth forecast for this year to 1.1–1.2%, down from the 1.8% estimate made in late July.
In its 2027–2029 Budget Resolution, the Ukrainian government projected GDP growth of 1.6% for this year, with acceleration to 4.5% in 2027 and 5.3% in 2028. However, the government's draft state budget for 2027 is based on a pessimistic scenario of 1.3% GDP growth. Regarding the current year, the government initially forecast growth of 2.4%, later revising it to 1.6%; the Ministry of Economy now acknowledges the possibility that the forecast could be downgraded further to 0.5%.
