Ukraine’s economy was negatively affected by the destruction of power generation and transmission facilities.
The European Bank for Reconstruction and Development kept its forecast for Ukraine’s GDP growth in 2024 at 3%, but revised it down for 2025 from 6% to 4.7%. This was stated in the EBRD report on Thursday, September 26.
“The destruction of power generation and transmission capacity and facilities is negatively affecting the Ukrainian economy and has already delayed four quarters of significant GDP growth. Considering this, the bank lowered its growth forecast for Ukraine for 2025 to 4.7%, compared to 6% in the May report,” the EBRD said.
The forecast also sees inflation stabilizing below the 5% target in the first half of the year before reaching 5.8% in July 2024. Therefore, monetary easing has been suspended by the central bank after several policy rate cuts between July 2023 and June 2024, when the rate is lowered from 25% to 13%.
“Near-term growth prospects remain highly uncertain. Improved export prospects, supported by the Black Sea corridor along the coast, may be outweighed by power shortages,” the report said.
There is also a labor shortage, and the risk of further destruction of infrastructure and production capacity remains.
At the same time, the updated forecast of the EBRD is more optimistic than the governments of Ukraine (2.7%), the IMF (2.5-3.5%) and the National Bank (4.1%).
Let’s recall that in July, Ukraine was included for the first time in the category of upper-middle income countries.
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.