The updated World Bank forecast notes that discussions on a potential ceasefire between Russia and Ukraine began earlier this year; however, the prospects for a long-term settlement remain uncertain. Ukraine’s economic growth is expected to rise to 5.2% by 2026. This growth acceleration considers the bank’s expectation that the Russian invasion “will last until the end of 2025, after which active hostilities will begin to subside.”
The projected growth in 2026 assumes a surge in investment in manufacturing and reconstruction, while the recovery of exports will remain limited due to a challenging trading environment and economic uncertainty. Reconstruction and recovery costs are estimated at $524B, almost three times Ukraine’s GDP in 2024.
According to the WB assessment, without a solid peace agreement, a continued or intensified invasion could further weaken Ukraine’s economy and maintain high geopolitical tensions. It is emphasized that support from Europe and the United States plays a vital role for Ukraine. The World Bank rates EU support as much higher.