ICU Investment Group forecasts a slowdown in Ukraine’s real GDP growth in 2026 to 1.2% from 2.1% in 2025, while in July the company forecast GDP growth of 2.5% this year and 2.8% next year.
“Macroeconomic risks are under control, but economic recovery is slow,” according to ICU’s updated macroeconomic forecast released on Tuesday.
ICU noted that the European Union’s (EU) decision to grant Ukraine a loan should provide the preconditions for macroeconomic stability, financing the budget deficit, and supporting the National Bank’s reserves in 2026-2027, as well as creating the basis for the implementation of a new cooperation program with the International Monetary Fund for at least the next two years.
At the same time, according to the investment group, Ukraine will need additional bilateral loans and grants to fully cover its defense needs.
ICU expects economic growth to slow down primarily due to damage to energy and transport infrastructure from Russian attacks, electricity shortages, and complications with maritime exports, which will cause temporary downtime for large manufacturers.
Additional restraining factors include a gradual reduction in the state budget deficit and fiscal stimulus, as well as business hesitation to invest due to high security risks. Private consumption will remain the key driver of growth.
According to ICU’s forecast, annual inflation at the end of 2026 will be 6-7%, and the National Bank of Ukraine will move to ease monetary policy at the end of January with a cumulative reduction in the discount rate by 200 basis points during the year to 13.5%.
According to the company, the National Bank will slightly weaken the hryvnia in 2026 amid slowing inflation and growing external imbalances, and forecasts the hryvnia-dollar exchange rate at the end of next year at UAH 44.3/$1, which is slightly better than the July forecast of UAH 44.9/$1. Reserves, according to the investment group’s estimates, will remain at record levels thanks to EU funding.
According to ICU estimates, at the end of 2025, inflation will be 8.3%, the hryvnia exchange rate will be 42.4 UAH/USD, international reserves will be $53.1 billion, the current account deficit will be 18.2% of GDP, the budget deficit (before official grants) will be 22% of GDP, and public debt will be 101% of GDP.
For 2026, the company forecasts inflation at 6.3%, international reserves at $52.3 billion, a current account deficit of 16.8% of GDP, a budget deficit of 19% of GDP, and public debt of 109% of GDP.As reported, at the end of October, the National Bank downgraded its forecast for the country’s economic growth in 2025 from 2.1% to 1.9% due to energy shortages, the destruction of gas production facilities, and labor shortages, and for 2026 from 2.3% to 2%.
