Page 12 - Ukraine OUTLOOK 2025

growth in mechanical engineering.
The Minister of Agricultural Policy of Ukraine, Vitaly Koval, confirmed that the agro-industrial sector's share of Ukraine's GDP is approximately 20%, with agricultural production comprising about 11% and the processing industry accounting for 9%.
Given that Ukraine's GDP in 2024 is about UAH7bn, the agro-industrial complex accounts for UAH1.2bn in total, with agriculture responsible for UAH0.77bn and agro-processing UAH0.6bn.
The IMF improved its economic growth forecast for Ukraine for 2024 from 3% to 4% on November 22, as the Ukrainian economy has performed better than expected in the previous two quarters. The National Bank also improved its forecast for real GDP growth in the third quarter from 3.1% to 4%.
Economic growth remains broad-based, and nearly all demand-side GDP components make substantial positive contributions. The key driver is private consumption, supported by a rapid recovery in household incomes.
Ukraine's economy grew by 4.2% over the 10 months of the year, and in October, growth slowed to 1.3% against 3.8% in September, reports the Ministry of Economy. It is noted that the drivers of growth remain the transport and construction industries, as well as the processing industry, which all demonstrate high positive dynamics.
Ukraine faces enormous reconstruction costs after the war. Based on World Bank estimates, wiiw now puts these at over $500bn, which is almost three times Ukraine’s current annual economic output. To date, it remains largely unclear how this will be financed. ‘However, the reconstruction of many areas – such as energy and transport infrastructure, housing and production facilities – should already be accelerated during the war,’ Pindyuk emphasises.
FitchRatings: What awaits the Ukrainian economy and when the war will end? Fitch Ratings predicts a slowdown in Ukraine's economic growth. In 2024, GDP growth is predicted to reach 4%, facilitated by the normalisation of Black Sea trade activity, high government spending and household income. In 2025 economic growth is forecast to slow to 2.9% due to labour and electricity shortages. However, "a long-term and reliable ceasefire could significantly improve the country's growth prospects in 2025-2026." As for inflation, Fitch's estimate is 9.3% in 2025 versus 6.2% in 2024. The ratings agency expects Russia's war against Ukraine to continue in 2025 within its current broad
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