Ukraine government cuts GDP growth forecast after energy strikes caused Q1 contraction
Oleksii Sobolev, Minister of Economy, Environment, and Agriculture (Photo: Oleksii Sobolev / Facebook)
Ukraine's Cabinet of Ministers is preparing a downward revision of its macroeconomic forecast, with GDP growth projected to come in below the 2.4% target set in the state budget, Economy Minister Oleksii Sobolev said in an interview with RBC-Ukraine on May 18.
The revision is driven by a GDP decline of more than 1% in January and February, which Sobolev attributed to large-scale Russian strikes on energy infrastructure and the resulting blackouts.
"We are now preparing a revision of the macro forecast," Sobolev said. “It was prepared for the budget before winter, so of course it will be revised — we always revise the forecast mid-year. Our budget was planned with 2.4% GDP growth; the forecast will be reduced because we had negative GDP in January and February.”
He noted that a "strong rebound" has been underway since March, with the economy recovering somewhat faster than expected.
The government is counting on the positive momentum of the spring recovery to partially offset the added pressure of rising fuel prices stemming from the war in Iran, which is contributing to inflation risks.
According to Ukraine's State Statistics Service, GDP growth slowed to 1.8% in 2025, down from 2.9% in 2024 and 5.5% in 2023, following a 28.8% collapse in 2022 — the first year of Russia's full-scale invasion.
In the four quarters of 2025, Ukraine's real GDP grew 0.8%, 0.7%, 2.1% and 3.0% year-over-year, respectively.
In January 2026, Ukraine's Economy Ministry estimated real GDP growth in 2025 at 2.2%.
In February 2026, the European Bank for Reconstruction and Development (EBRD) halved its Ukraine growth forecast for 2026, projecting real GDP growth of 2.5% in 2026 and 4% in 2027, assuming the war continues through 2026.
The EBRD's previous September 2025 forecast had projected 5% growth in 2026, assuming a ceasefire and post-war reconstruction dividend.
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