The negative factors that influence economic growth in the second half of 2024 will probably remain in 2025, according to the EBRD.
The European Bank for Reconstruction and Development (EBRD) worsens the forecasting of Ukrainian economic growth from 2025 to 3.5%, while in September last year it is expected at 4.7%. This is stated in the EBRR report, published on Thursday, February 27.
“Although Ukraine entered 2025 with safe external financing for one year, it faced a slowing down economic growth and accelerating inflation due to the influence of war, which began with the Russian aggression in February 2022,” the report said a weak impulse against the background of trade and investment fragments.
It has been mentioned that the war continuing and Russia’s massive attack on Ukrainian electricity infrastructure has joined as a lack of electricity, forcing the Ukrainians to pay high prices for the imported electricity and a chronic labor shortage. The growth of the true GDP is noticeably slowing down from more than 5.0% in the first half of 2024 to about 2.0% in the second half of the year. The total GDP indicator of 2024 was estimated at 3.0%.
The EBRD added that the continuation of inflation in the second half of 2024 was due to increased cost of electricity, the correction of utility prices, the rapid increase in real wages and the backdrop of hryvnia to the US dollar after weakening the exchange rate of exchange rate in October 2022.
“The annual inflation reached 12% in December 2024 and will probably remain at the same level in the first half of 2025, and by the end of the year it will again decrease with an unambiguous indicator,” the bank predicts.
According to the EBRD, Ukraine’s budget deficit for 2025 will be 19.4% of GDP and fully funded an external budget financing of $ 38.4 billion. $ 2.7 billion from IMF.
The negative factors that influence the growth in the second half of 2024 will probably remain in 2025, according to the EBRD.
At the same time, from the positive side it is expected that the proven stability and flexibility of a business, a good sea corridor, a strong stimulus of public consumption and increasing military acquisition will contribute to economic growth.
Earlier, the National Bank released the forecast for inflation and GDP in Ukraine for 2025. Thus, economic growth was slow to 3.6% from 4.3% in the previous October forecast, and inflation would grow by 8.4% from 6.9%.
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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.