The World Bank sharply worsened the forecast for the economy of Ukraine for 2027

The World Bank has significantly lowered its forecast for Ukraine’s economic growth for 2027. Instead of the previously expected 4%, the country’s real GDP, according to new estimates, may grow by only 1.5%. One of the key factors in revising the forecast is the assumption that active hostilities will continue throughout 2027.

This is stated in the updated World Bank Economic Review for Europe and Central Asia.

The forecast for 2027 has been lowered by 2.5 percentage points

Back in April, the World Bank expected the Ukrainian economy to grow by 4% in 2027.

Now the forecast is only 1.5%, that is, it has been immediately worsened by 2.5 percentage points.

The baseline scenario on which the calculations are based has also changed. Previously, it was assumed that active hostilities could end at the end of 2026. The updated scenario assumes that they will continue throughout next year.

In 2026, the economy may grow by only 1.2%

According to the World Bank, the growth of Ukraine’s real GDP in 2026 will slow to 1.2% — this could be the lowest figure in the last four years.

Among the reasons for this slowdown are the increased attacks on critical infrastructure, labor shortages and high energy costs.

Additional pressure on the economy is created by damage to manufacturing enterprises, ports, warehouses and transport infrastructure, as well as restrictions on access to European markets, which restrains Ukrainian exports.

At the same time, increased government spending on defense is partially supporting economic activity due to increased production in the defense industry.

External financing remains one of the main risks

The World Bank separately draws attention to Ukraine’s need for international financial support in 2027.

A significant part of the necessary financing has not yet been secured, and negotiations with international partners are ongoing.

An additional risk could be delays in implementing agreed reforms. They could slow down the inflow of international funds and widen the financing gap.

When the economy may accelerate

The World Bank expects a more noticeable recovery in 2028.

According to the current forecast, Ukraine’s real GDP could then grow by about 3%.

Thus, the current World Bank forecast predicts that the Ukrainian economy will grow by 1.2% in 2026, 1.5% in 2027, and 3% in 2028.