Economic recovery accelerates in third quarter compared to second quarter - NBU

The pace of economic recovery in the third quarter accelerated compared to the second quarter of 2025.

This is stated in the report of the NBU, the Ukrainian News agency reports.

The main driver was the fiscal impetus driven by the expansion of budget expenditures.

A better situation in the energy sector in the third quarter of 2025 compared to the same quarter of 2024 also had a significant impact on economic growth.

The actual real GDP growth rate was in line with the NBU's estimate in its October 2025 Inflation Report.

Government consumption grew by 12.2% yoy, making the largest positive contribution to real GDP growth at 4.1 pp. This fiscal impetus was made possible by substantial international financing.

Households' final expenditures continued to increase (by 6.7% yoy), and their contribution to GDP growth remained positive (3.9 pp).

Gross fixed capital accumulation grew by 11.5% yoy and made a significant positive contribution to real GDP growth (2.2 pp). In addition to the revival in construction activity, investments in agricultural processing and defense projects continued to increase. This was, in particular, facilitated by significant capital budget expenditures, the nominal volumes of which in the third quarter were among the highest since the beginning of the full-scale invasion (higher volumes were only in the fourth quarters of 2023 and 2024).

The negative contribution of net exports to GDP growth increased.

The physical volume of exports continued to decline due to low stocks of agricultural products and weak demand for mining and metals products, as well as the new terms of trade with the EU. At the same time, the growth in imports of goods and services accelerated amid increased purchases of machine-building and metallurgical products to boost defense capabilities and rebuild infrastructure. As a result, the negative contribution of net exports to GDP growth increased to 8.9 percentage points.

The economic performance by type of activity was uneven.

The expansion of budget expenditures supported the public administration and defense sectors, whose gross value added (GVA) increased by 15.1% yoy. Other budget sectors also grew, including education, healthcare, and social assistance.

The better situation in the energy sector in the third quarter of 2025 compared to the same quarter of 2024 contributed to the acceleration of the energy sector's GDP growth (up to 6.7% yoy) and supported other sectors of the economy. In particular, the manufacturing industry's GVA increased by 1.7% yoy, while the rate of decline in the mining industry slowed to 2.1% yoy.

Due to robust domestic demand, stable energy supply and government support programs, the growth of construction works accelerated significantly to 31.5% yoy. Against the backdrop of rising private consumption, the trade sector's gross domestic product (GDP) continued to grow (by 2.6% yoy).

The decline in agricultural output slowed to 12.3% due to the postponement of some harvesting from the second to the third quarter. At the same time, the harvesting of late crops is slower than previously expected, which will lead to a similar shift from the third to the fourth quarter. The situation in poultry farming remained generally stable, while production in livestock continued to decline due to the deteriorating epizootic situation and the effects of the war.

The performance of the transportation sector also continued to decline, deepening to 9.3% yoy amid a decline in export transportation.

According to the NBU's October forecast, in the fourth quarter of 2025, economic recovery will accelerate to 3.4% due to the expansion of fiscal stimulus and private consumption. Taking into account the results of the previous quarters, the NBU expects that in 2025 real GDP growth will be close to the October forecast (1.9%). In the coming years, a moderate acceleration of economic growth (up to 2-3%) is expected due to increased harvests and increased investment in reconstruction projects and the defense sector.

A full-scale war remains the main risk to economic development. In addition, the realization of risks, in particular those related to the irregularity and/or insufficiency of external financing, may have a significant impact on GDP dynamics.

At the same time, positive scenarios remain likely to materialize. They are primarily associated with a possible increase in military and financial support from partners and the international community's efforts to ensure a just and lasting peace for Ukraine.

As the Ukrainian News agency earlier reported, in the third quarter of 2025, real GDP grew by 2.1% in annualized terms (yoy), and by 0.8% in seasonally adjusted terms compared to the previous quarter. This is evidenced by the detailed indicators published by the State Statistics Service of Ukraine.