Ukraine's real GDP down 1.5% YoY in Feb 2026 after 1% decline in Jan - IER

MOSCOW. March 23 (Interfax) - Ukraine's real GDP decreased 1.5% year-on-year in February 2026, according to the Institute for Economic Research and Policy Consulting (IER).

Ukrainian media said citing the IER's Monthly Economic Monitoring report available on its website that the institute had reviewed its estimate of real GDP's decline in January 2026 down to 1% from 1.4% in its previous report.

It said Ukraine's GDP continued to shrink in February due to damage to energy, railway, and other critical infrastructure.

The IER estimated a slump in real gross value added (GVA) in the mining and quarrying industry at about 14% YoY in February due to

disruptions in the extraction of gas, iron ore, and coal. Electricity generation and gas distribution also decreased by 14% YoY in February due to large-scale damage to energy infrastructure, it said.

Real GVA in Ukraine's manufacturing sector declined by 7% YoY, the IER said. At the same time, several enterprises, including ArcelorMittal, announced the halt of certain assets over the Carbon Border Adjustment Mechanism (CBAM) introduced by the European Commission starting January 1, 2026 without exemptions or a transitional period for Ukrainian producers, as well as due to high electricity costs.

The IER estimated real GVA growth in trade at 2.0% YoY, driven primarily by higher retail turnover and demand for fuel.

At the same time, it said real GVA in transport dropped in this period by about 14% YoY.

The economic situation in March is likely to be affected not only by the crisis in Ukraine, but also by the situation in the Middle East, it said.

"It has already led to higher fuel prices, although Ukraine had inventories and demand decreased somewhat amid improved access to electricity in early March. At the same time, in April the situation may worsen, according to our estimate," it said.