World Bank cuts Ukraine's 2027 GDP growth forecast to 1.5% from 4%

The World Bank has revised its forecast for Ukraine's real GDP growth, projecting it to slow to 1.2% in 2026 from 1.8% last year, and only reaching 1.5% in 2027, down from the initial anticipation of 4%. This decrease is attributed to the ongoing active hostilities expected to persist through 2027, up from the prior assumption of an end by late 2026.

The bank's report, published on Tuesday in its Europe and Central Asia Economic Update: Making AI Work: Jobs, Firms, and Productivity, highlights the uncertainty surrounding securing external financing for 2027, with substantial needs yet to be fully addressed and negotiations with international partners still in progress. Additionally, delays in implementing agreed reforms could further impede disbursements and widen the financing gap.

Despite these challenges, the bank estimates that GDP growth could rebound to 3% in 2028. The European Bank for Reconstruction and Development (EBRD) had previously downgraded its forecast for Ukraine's GDP growth to 1.5% in 2026 and 2.5% in 2027. The Ukrainian Economy and Environment Minister, Oleksandr Kravchenko, acknowledged a downward revision of the 2027 GDP growth forecast by 0.3-0.5 percentage points, reducing it from 1.3% to between 0.8-1%, and for 2026 from 1.6% to 0.8-1%.

The National Bank of Ukraine (NBU) also adjusted its estimate for real GDP growth this year to between 1.1-1.2%, down from its previous projection of 1.8% at the end of July. Investment firm Dragon Capital has also revised its macroeconomic forecast, now anticipating a decline in real GDP of 0.5% this year and next year.