Analysts cut estimate for Ukraine's 2025 GDP growth to 1.8% from 2.2%

MOSCOW. Jan 21 (Interfax) - Ukraine's real GDP growth stood at 1.8% in 2025, which is below the previous estimate of 2% from the Institute for Economic Research and Policy Consulting (IER) and the Economy Ministry's forecast of 2.2%, Ukrainian media reported, citing the IER.

The IER's Monthly Economic Monitoring of Ukraine shows that real GDP increased by 5.2% year-on-year in November but its growth slowed to 3.4% year-on-year in December due to damage to the country's energy and railroad infrastructure. Positive dynamics at the end of 2025 was supported by the agricultural sector, where gross value added (GVA) grew by 54% in November and by 35% in December, by the trade sector, where GVA increased by 5.9%, by business services, and public administration.

Meanwhile, GVA in the extraction sector decreased by nearly 19% year-on-year in December 2025 due to the negative impact of the crisis on gas, ore and coal production. The production and distribution of electricity and gas shrank by 18% yaer-on-year.

Real GVA in manufacturing contracted by 1.9% in December 2025 year-on-year because of problems with access to electricity. However, the decline could have been larger if businesses had not adapted to the situation by using generators, co-generation systems and solar panels. Industrial activity was also supported by procurement. The GVA drop in the transport sector accelerated to 10%.

Ukraine increased electricity imports by 53% month-on-month to 640,000 MWh in December. It did not export any electricity in December. Overall, companies in Ukraine commissioned 762 MW of new gas generation in 2025. The total capacity of qualified co-generation units exempt from the excise tax reached 3.1 GW.

Consumer price inflation slowed to 8% in 2025 year-on-year. The consumer price index grew by only 2% month-on-month in December 2025, one of the lowest figures for Ukraine since gaining independence after the Soviet breakup. According to the IER report, the inflation rates were restrained by a good harvest, stable prices for food and oil on the world market, as well as by moderate consumer demand and high competition among non-food goods.

As reported, the Economy Ministry estimates real GDP growth at 2.2% in 2025.

ICU Investment Group has also worsened its forecast for Ukraine's economic growth in 2026 to 1.2% from 2.1% in 2025. In its July 2025 report, the company projected GDP growth at 2.5% in 2025 and at 2.8% in 2026.