Economy Ministry worsens GDP growth forecast in 2026 to 1.6%

The Ministry of Economy has worsened the GDP growth forecast in 2026 to 1.6%.

This is stated in the Budget Declaration for 2027-2029, approved by the Cabinet of Ministers Resolution No. 793 of June 17, Ukrainian News Agency reports.

"According to the Ministry of Economy's estimates, it is expected that by the end of 2026, real gross domestic product growth will slow down to 1.6 percent. The main risks to economic growth remain security factors, in particular the consequences of shelling of energy and transport infrastructure facilities, which leads to disruptions in production and logistics, as well as the further loss of production capacity, which limits production volumes and worsens the functioning of key sectors of the economy, restraining business and investment activity," the document says.

An additional source of risk is the increased volatility in global energy markets due to geopolitical tensions, in particular in the Persian Gulf, which creates risks of increased production costs, increased inflationary pressure and worsening foreign trade conditions.

At the same time, inflation (December to December) is forecast at 9.2%, the hryvnia exchange rate at the end of 2026 is forecast at 45.8 UAH/USD.

Under the baseline (positive) scenario, which assumes a significant improvement in the security situation from 2027, the Cabinet of Ministers forecasts GDP growth in 2027 by 4.5, inflation (December to December) at 8.9%, the hryvnia exchange rate at the end of 2027 is forecast at 48.3 UAH/USD.

As Ukrainian News Agency earlier reported, the state budget for 2026 was developed based on a macroeconomic forecast that predicted GDP growth of 2.4%, inflation (December to December) at 9.9%.

The Cabinet of Ministers predicts that in 2027, GDP growth will be 4.5% under a positive scenario, 1.3% under a negative scenario.