WB downgrades Ukraine's 2026 GDP growth forecast to 1.2%

MOSCOW. April 9 (Interfax) - Ukraine's economic growth will slow down to 1.2% in 2026 from 1.8% in 2025 and is expected to accelerate to 4% in 2027, the World Bank said its latest forecast published in its Europe and Central Asia Economic Update, according to Ukrainian media.

Growth in Ukraine is expected to slow to 1.2% this year, in part due to rising energy costs, labor constraints, and fiscal pressures, it said.

Last September, the World Bank had downgraded its economic growth forecast for Ukraine to 2% from 5.2% for 2026 and to 4% from 4.5% for 2027.

Growth in Ukraine fell to 1.8% in 2025 from 3.2% in 2024 due to renewed damage to the energy and industrial infrastructure, supply disruptions, heightened uncertainty, and worse labor shortages, it said.

Manufacturing and investment growth was supported by reconstruction and military spending; however, this was not enough to offset weakness in other parts of the economy, it said.

On the demand side, the reinstatement of the trade scheme with the EU that was in effect before February 2022 and the subsequent revision of the EU-Ukraine Deep and Comprehensive Free Trade Area limited Ukraine's export opportunities, especially for agricultural and food products, it said.

Ukraine's outlook depends on the duration of the crisis and sustained external assistance. However, even if growth accelerates to 4% in 2027, it is going to remain below earlier forecasts, the World Bank said.

The bank's analysts assumed that well-managed reconstruction and strong progress in advancing EU integration would provide Ukraine with a clear path to creating a dynamic, competitive, and resilient economy, although utilizing this potential would require more profound structural reforms.

As reported, the NBU lowered its forecast for Ukraine's real GDP growth in 2026 to 1.8% in January 2026 from 2.0% in October 2025.

The investment company Dragon Capital improved its forecast for Ukraine's real GDP growth in 2026 by 0.5 percentage points to 1.5%.