The IMF has worsened expectations for Ukraine’s economy and predicts an electricity shortage until 2026.

The IMF has downgraded Ukraine’s economic growth forecast for 2024 and 2025 due to the consequences from Russian shelling of energy infrastructure. The revised forecast states that Ukraine’s GDP is expected to grow by 2.5-3.5% in 2024. In March, the IMF predicted growth of 3-4%. The forecast for 2025 has been downgraded to 5% from 5.5%.

“Recovery will slow down, especially given the attacks on Ukraine’s energy infrastructure, and the outlook is prone to high risks due to the exceptionally high uncertainty associated with the war,” IMF chief Kristalina Georgieva said.

In a letter of intent to IMF leadership, Ukraine noted that the Russian Federation destroyed over 50% of its generating capacity, and losses exceeded $1B in the spring. According to the IMF’s assessment, the destroyed capacity is estimated at more than 80% for thermal power plants and more than 40% for hydroelectric power plants.

Against this background, the IMF predicts that the average electricity deficit in Ukraine in 2024 will be about 10%, will gradually decrease during 2025, and will be eliminated by the beginning of 2026.