Ukraine’s economy is expected to grow by 3%, while inflation is anticipated to slow significantly.

Thursday, April 17, 2025
Ukraine’s economy is expected to grow by 3%, while inflation is anticipated to slow significantly.

ICU analysts observe that that the Ukrainian economy has shown modest growth since the third quarter of 2024, and predict a low probability of a substantial acceleration in recovery. The need to gradually reduce the budget deficit and government spending will severely limit economic growth in the coming years. Therefore, the economy is projected to expand by 3% this year and next, driven by a rebound in household consumption and a better harvest.

Annual inflation is expected to fall sharply starting in June, given last year’s high base and the increased supply of agricultural products. By year-end, consumer price growth is projected to slow to 7-8%.

The NBU plans to keep the policy rate at its current level until September, and it is likely to cut it three times by 50 basis points by the year’s end.

Ukraine is set to receive over $50B this year, which will lead to a significant increase in NBU reserves, providing more resources to support the hryvnia exchange rate at ₴43.5 per $1 in 2025. This year, foreign aid will almost cover the state’s budget deficit.

 

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