Why did Ukraine’s economic recovery slow down last year compared to 2023?

Ukraine’s real GDP grew by 2.9% in 2024. Although the economy experienced growth for the second consecutive year amid the full-scale war, the pace of recovery decelerated compared to 2023, when GDP increased by 5.5%.

The NBU cited the worsening security situation, renewed electricity shortages, and low harvests as reasons for the slowdown. By the end of last year, gross value added (GVA) in agriculture fell by 7.3%, and the energy sector’s GVA decreased by 2.7%.

However, for the first time since the war began, the extractive industry’s indicators improved by 3.6%. The manufacturing industry grew by 6%, but the trade sector saw a 4.1% decline. In contrast, the financial sector experienced the largest growth, at 27.4%. Additionally, GVA in the IT sector grew by 8.3%, while construction grew by 16.2%.

The NBU expects GDP growth to remain stable in 2025 due to key factors such as better harvests, reduced energy constraints, and a revival of external demand. Nonetheless, the war will continue to impede economic recovery due to labor shortages, infrastructure damage, and the loss of production capacity.