What will happen to Ukraine’s economy if peace is achieved without security guarantees or if the war continues in 2026?

The IMF’s baseline scenario assumes the end of Russia’s war against Ukraine by the end of 2025. According to IMF expectations, if peace is reached Ukraine’s economic growth will rise to 4.5% in 2026. However, Ukraine needs guarantees and resources for economic growth.

“A peaceful settlement without reliable security guarantees and/or sufficient financial resources for reconstruction and defense could lead to adverse economic and social consequences,” experts warn.

The IMF notes that uncertainty will hinder the return of refugees, the pace of reconstruction, and the resumption of foreign direct investment.

At the same time, the negative scenario still assumes an end to the war in the second quarter of 2026, as peace talks have not yet produced concrete results. This updated forecast indicates that the primary negative impact would occur in the third quarter of 2025, leading to a 1% decline in real GDP in 2025 and zero growth in 2026. Ukraine’s financing needs are expected to increase by $12.4B.