The forecast points to another year of sluggish expansion
for a wartime economy still strained by large external imbalances, inflation
pressures and heavy financing needs, even as international lenders credit Kyiv
with preserving macroeconomic stability and pushing ahead with reforms.
In its April World Economic Outlook, the IMF said inflation
in Ukraine would slow to 7.5% in 2026 from 8% in 2025, then ease further to
7% in 2027.
The Fund expects Ukraine’s current account deficit to
widen to 18.9% of GDP this year from 15% in 2025, before narrowing to 16.6%
next year.
That gap is expected to be financed by continued large-scale
net government borrowing, projected at 18.4% of GDP this year and 17.7%
next year, down from 23.3% of GDP in 2025.
The IMF also forecasts unemployment falling from
11.6% last year to 10.2% this year, then rising to 12% in 2027.
When the Fund approved a new four-year Extended Fund
Facility program for Ukraine in late February, it projected GDP growth this
year in a range of 1.8% to 2.5%, with inflation at 7.5% and the current account
deficit widening to 19.1% of GDP.
The IMF’s April report also included a section on Ukraine’s
handling of the economic crisis and its broader stabilization after Russia’s
full-scale invasion.
The Fund said the invasion triggered a steep economic
collapse, with output falling by more than one-third in the second quarter of
2022. Heavy fighting, infrastructure destruction, trade disruptions and
large-scale emigration, it said, created a sharp imbalance between supply and
demand, fueling inflation and widening the trade deficit.
At the same time, the IMF said Ukraine entered the crisis
with strong prewar fundamentals and institutions that had been reinforced by
years of reforms, including through Fund-backed programs, allowing policymakers
to move quickly to protect macroeconomic stability.
“Ukraine’s crisis preparedness, shaped by wartime
contingencies after the annexation of Crimea in 2014, and strong initial
conditions were critical to crisis management,” the Fund said.
Its experts added that stabilization also depended on the
authorities’ commitment to an ambitious reform agenda backed by the EFF and by
large-scale concessional financing, including the EU’s Ukraine Facility, as
well as in-kind support.
“The reform agenda, covering revenue mobilization, public
financial management, governance and anti-corruption measures, as well as
financial sector infrastructure, helped lay the foundation for the postwar
economy,” the IMF concluded.
Ukraine’s central bank also lowered its 2026 growth forecast
in late January, cutting it to 1.8% from 2% because of a worsening situation in
the energy sector, while keeping its 2027 forecast at 2.8%.
The National Bank of Ukraine also raised its year-end
inflation forecast to 7.5% for 2026 from 6.6%, and to 6% for 2027 from 5%.
The World Bank also cut its 2026 growth forecast for Ukraine
in April, lowering it to 1.2% from 2%, though it expects growth to accelerate
to 4% in 2027.