How did Russia’s destruction of energy infrastructure affect the IMF’s forecast for Ukraine’s economy?

The IMF’s latest forecast for Ukraine’s economic growth in 2024-2025 was significantly lowered, primarily due to Russia’s destruction of the Ukrainian energy infrastructure and uncertainty about the war’s further development, said Alfred Kammer, head of the IMF’s European Department.

“If you look at our forecasts for 2025, we have lowered them, which indicates the expectation that the war between Russia and Ukraine will continue. We assumed it would stop earlier, but it did not happen,” Kammer added.

And this, according to him, creates additional costs for the Ukrainian economy.

The head of the IMF, Kristalina Georgieva, praised Kyiv’s performance in managing the economy but advised mobilizing domestic revenues, which involves reviewing the tax system and tax collection.

In the latest WEO forecast, the IMF lowered economic growth forecasts for Ukraine for 2024 from 3.2% to 3%, and for 2025 – from 6.5% in the April report to 2.5% in the latest WEO issue.