Fitch has confirmed Ukraine’s likely default and improved Ukraine’s GDP growth forecast to 5.1% this year.

International rating agency, Fitch Ratings, has confirmed Ukraine’s long-term issuer default rating (EDR) in foreign currency at the CC level. Fitch expects the war to continue through 2024. At the same time, no politically justified concessions exist that could lead to a negotiated end to the war, which creates the potential for a very protracted conflict.

“In the longer term, we expect some form of settlement, but consider a frozen conflict more likely than a durable peace agreement, at least for a significant period,” Fitch said.

Meanwhile, the agency raised the forecast for Ukraine’s GDP growth in 2023 from 3.5% to 5.1%. However, analysts forecast a slowdown in economic recovery and GDP growth at 3.8% in 2024 and 4.5% in 2025. The budget deficit is projected to be high: 16.9% of GDP in 2024 and 16.3% in 2025, compared to 17% of GDP (including grants) in 2023.