Ukraine’s economy is projected to expand by 2.5% in 2025, down from a previously forecast 3.3%, as the ongoing war with Russia weighs on investment and trade, the European Bank for Reconstruction and Development (EBRD) said in a press release on September 25.

In its latest Regional Economic Prospects report, the EBRD said Ukraine had “largely maintained macroeconomic stability despite war” but warned that “Ukraine’s economic outlook is highly uncertain, depending on the war’s course, energy security and continued international support.” The Bank kept its 2026 forecast unchanged at 5% growth, assuming a ceasefire and the benefits of post-war reconstruction.

Real GDP grew 0.9% year on year in the first quarter of 2025, supported by consumption and infrastructure investment. But labour shortages, weak agricultural exports and damage to energy infrastructure remain significant constraints. The unemployment rate has fallen to 12%, the lowest since the war began, though mobilisation and emigration continue to hamper recruitment.

The current account deficit widened by nearly 50% in January–July, reflecting high military and energy imports. The fiscal deficit is expected to reach 22% of GDP in 2025, financed by about $40bn (€34bn) in external support, much of it from the EU, G7 partners using income from frozen Russian assets, and the IMF.

Inflation, still elevated by food and utility prices, has begun to ease, slowing from 15.9% in May to 13.2% in August. The National Bank of Ukraine has held its policy rate at 15.5% since March to moderate price growth. Foreign reserves rose to $46bn in August, equivalent to 5½ months of imports, underpinning exchange rate stability.

The EBRD, Ukraine’s largest institutional investor, said it has made nearly €8.4bn available to the country since Russia’s full-scale invasion in February 2022, including €3bn for the energy sector. The Bank’s support has focused on energy security, critical infrastructure, food supply chains, trade and private sector resilience.

Across the EBRD’s regions of operation, the Bank forecast economic growth of 3.1% in 2025, rising to 3.3% in 2026.