Key points
The analytical center Institute of Economic Research and Policy Consulting (IED) estimates real GDP growth in Ukraine for 2025 at 2%. This is a positive sign during wartime, but growth could have been higher if not for systemic damage to the energy sector, ports, railways and gas extraction facilities.
Why growth is only 2% — breakdown of reasons
There are four main factors that restrained the economy:
1) Energy. In November 2025 power outages again entered the top three biggest obstacles for business — this is not only a discomfort for households but also a real loss of production capacity and additional costs for backup power sources.
2) Labor force. A shortage of staff and the outflow of young men (ages 18–22), who were allowed to leave the country, complicated recruitment. According to the Ministry of Economy, unemployment remains high due to a skills gap and regional disparities.
3) Infrastructure hits. Large-scale destruction of ports and railways disrupted export flows, especially grain and oilseeds, reducing foreign currency inflows and increasing pressure on the trade balance.
4) Currency and price shocks. The depreciation of the hryvnia against the euro pushed up the cost of imported raw materials, and logistical problems raised production costs.
"It is unlikely that peace will be achieved quickly this year, and therefore challenges and uncertainty will accompany us throughout the year. Overall, we expect real GDP growth in 2026 to be only slightly higher than 2%."
— Institute of Economic Research and Policy Consulting (IED)
What this means for people and business
First, for households: growth in real incomes and pension indexation supported consumer demand, but energy vulnerability and more expensive imported goods limit real gains in purchasing power.
Second, for business: machine-building and metallurgy benefited from demand for defense products and the domestic market, but export sectors dependent on port logistics experienced a downturn. Investment is increasing, but is partly offset by high risk and logistical barriers.
Third, for investors and partners: 2% in wartime is a sign of confidence, but to turn declarations into real investments, stable energy supplies, restoration of logistics and retraining programs for workers are needed.
Quick facts worth knowing
• In November 2025 GDP growth accelerated to 5.3% compared with 2.3% in October — partly due to expanded budget spending.
• The economy grew by 2.9% in 2024.
• Positives for sectors: higher grain harvests, demand for defense products and increased domestic demand for metallurgy.
Conclusion — what next?
Growth of 2% in 2025 is a sign of resilience, but not a reason for complacency. Until energy security, infrastructure restoration and workforce recovery programs become priorities, growth will remain constrained. Now the move is up to partners and government decisions: will they turn the fiscal impulse and announced plans into concrete investments in networks, logistics and human capital?
