The new IMF forecast talks about the possibility of the continuation of the war in Ukraine until the middle of 2026.
International Monetary Fund experts have updated their negative forecast for Ukraine, taking into account the possible continuation of the war for a longer time. The war could continue until mid-2026, the IMF said in a published analysis.
The forecast reflects the possibility of more intense fighting, which will lead to greater economic losses.
If the baseline scenario assumes the end of the conflict by the end of 2025, then in the updated forecast the external financing gap will increase to $177.2 billion compared to the previous $148 billion. Overall, macroeconomic fundamentals will worsen, with real GDP forecast to decline by -2.5% in 2025.
Particular attention in the IMF forecast is paid to the impact of the war on Ukraine’s energy infrastructure, which could lead to greater destruction and disruption of electricity supply compared to the baseline scenario. Because of this, economic recovery will be slow and inflation will remain high.
Despite the negative forecasts, the IMF noted the stability of the support program in Ukraine. Discussions with the government and international partners indicate the reliability of financial guarantees, which allows us to expect macroeconomic stability to be achieved even under these circumstances. In addition, in the medium term, a gradual approach to key indicators is possible thanks to European integration and return migration.
The updated forecast also takes into account higher defense needs and economic weakness, which will lead to a higher budget deficit in 2025-2026. At the same time, the forecast for inflation and economic growth will remain moderate, with a slow pace of economic recovery compared to optimistic estimates.
Remind you that earlier the International Monetary Fund made a statement about the economy and taxes in Ukraine.
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.