EBRD sees mounting pressure on Ukraine’s economic growth

The European Bank for Reconstruction and Development (EBRD) has expressed growing concerns over the potential deterioration of Ukraine's economic growth outlook. EBRD President Odile Renaud-Basso conveyed these worries during an interview with Interfax-Ukraine on October 2nd. According to Renaud-Basso, a decline in Ukraine's economic performance since August has been observed, stemming from intensified attacks on economic infrastructure.

This includes energy, ports, the Black Sea blockade, logistics, warehouses, and production facilities.

While reviewing estimates from the Ukrainian government, National Bank of Ukraine, and independent analysts, Renaud-Basso noted that the central bank has formulated multiple scenarios. The EBRD's current assessment indicates that risks are more inclined towards a further decrease in economic growth rather than an improvement. In June, the EBRD had projected a real GDP growth rate of 2.2% for 2026, but this was revised downwards to 1.5% in October. Similarly, the forecast for 2027 was reduced from 4% to 2.5%.

The Ukrainian State Statistics Service recently revised its estimate of second-quarter GDP growth to 0.4% year-over-year, down from the initially reported 0.6%. Real GDP contracted in the first quarter compared to the same period in 2025. In response to intensified Russian attacks, the National Bank of Ukraine raised its growth forecast for 2026 to 1.8% from the April Inflation Report's projection of 1.3%, attributing this to substantial external financing for domestic defense production.

However, the bank later lowered its estimate to 1.1–1.2% due to damage inflicted on industrial and commercial facilities and diminished business expectations. The International Monetary Fund also reduced its 2026 growth forecast for Ukraine to 1.0–1.6% in June-July, compared to 2% in its April World Economic Outlook.

The Ukrainian government has correspondingly reduced its official 2026 GDP growth forecast from the initially projected 2.4% to 1.6%. Economy and Environment Minister Oleksandr Kravchenko has warned that the growth could fall below this forecast due to intensified Russian attacks, with a scenario of around 0.5% growth also being contemplated.