The IMF lists labor shortages, damaged energy infrastructure, and Russia’s ongoing war as key factors dragging down GDP growth.
The fund estimates real GDP growth at 3.5% for 2024, but forecasts a drop to 2-3% in 2025.
Inflation, which climbed to 12.9% year-over-year in January, is driven by rising food prices and wages. In response, Ukraine’s National Bank raised its key interest rate by 150 basis points since December 2024.
The IMF also noted that international reserves reached $43 billion in January 2025, reflecting strong foreign financial support. Still, “risks remain extremely high due to uncertainty over the war and prospects for peace and recovery,” the report said.
Media previously reported that the IMF downgraded its 2025 growth forecast for Ukraine by 0.5 percentage points from its prior estimate, landing at 2-3%.
On Feb. 28, Prime Minister Denys Shmyhal said Ukraine and the IMF reached a staff-level agreement on the seventh review of the Extended Fund Facility program, worth about $15.5 billion. The government expects the next loan tranche after the IMF’s executive board approves the review.