The Vienna Institute for International Economic Studies (wiiw) forecasts a worsening outlook for Ukraine.

Thursday, July 3, 2025
The Vienna Institute for International Economic Studies (wiiw) forecasts a worsening outlook for Ukraine.

According to a new projection by the Vienna-based economic research institute, annual GDP growth slowed to 1% in the first quarter of 2025, down from 2.9% last year. For 2025, wiiw predicts growth of 2.5%, which is 0.5% lower than their spring forecast. Positive signs from strong consumer demand and robust industrial production, especially in the defense sector, will not be able to offset the damage caused by Russia’s ongoing aggression.

Inflation continued to rise from April to May and is now around 16%. “This forced the central bank to keep the key interest rate high at 15.5%, which, of course, is slowing growth,” experts say.

Additionally, the impact of a likely low harvest this year due to drought and the temporary suspension of duty-free access for Ukrainian agricultural products to the EU will also influence the economy.

“Ukraine’s economic development depends on financial and military support from the West. If Trump withdraws US support and the Europeans are unable or unwilling to compensate for it, this would have serious consequences,” analysts warn.

 

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