Ukraine’s real gross domestic product (GDP) fell by 0.5% in the first quarter of 2026 compared to the first quarter of 2025, following a 3.0% increase in the fourth quarter of last year, 2.1% in the third quarter, 0.7% in the second, and 0.8% in the first, the State Statistics Service reported on Tuesday.
According to its data, compared to the previous quarter, taking into account seasonal factors, real GDP decreased by 0.7%, while a quarter earlier this figure was positive at 0.7%.
As reported, the National Bank lowered its forecast for real GDP growth in 2026 to 1.3% from 1.8% in its January Inflation Report due to the still-dire state of the energy system and the accumulation of negative economic effects from the war in the Middle East. The NBU estimated GDP growth in the first quarter at 0.2%
At the same time, the Ministry of Economy estimated a 0.2% decline in GDP for January-February of this year.
As reported, according to the State Statistics Service, Ukraine’s GDP growth slowed to 1.8% in 2025 from 2.9% in 2024 and 5.5% in 2023, following a 28.8% decline in 2022—the first year of full-scale aggression.
Tourism should become a tool for Ukraine’s economic recovery, and a significant increase in the volume of Ukraine’s tourism industry is possible after the end of the war and complete security stabilization, according to Natalia Yakimenko, director of the travel agency “I’ll fly wherever I want!”
According to the annual study by the World Travel & Tourism Council (WTTC), by 2035, the contribution of travel and tourism to Ukraine’s GDP could grow 1.5 times to $16.1 billion, exceeding the pre-pandemic 2019 figures, when this indicator was 620.4 billion UAH ($15.5 billion, 6.3% of GDP). The global tourism market has already managed to recover after the decline due to the COVID-19 pandemic, but the war in Ukraine is still preventing tourism from being fully utilized as a tool for economic development.
“A 1.5-fold increase in foreign tourism is possible primarily after the end of the war and complete security stabilization. An important factor could be the restoration of the possibility for men to travel abroad freely, as many families are currently unable to travel together. The market will also be supported by the potential return of Ukrainians from abroad, as people who have lived in other countries for some time will retain the habit of traveling,” Yakimenko commented to the Interfax-Ukraine agency.
She stressed that a necessary factor is the restoration of direct air links, which will make travel to and from Ukraine easier and more affordable. “Provided there is economic growth and income stabilization, demand may recover fairly quickly,” Yakimenko said.
The Ukrainian hospitality industry has significant potential for growth in volume and an increase in its share of the economy as a whole. For comparison: according to WTTC data, the contribution of travel and tourism to global GDP was $11.7 trillion in 2025, which is 7.3% more than in 2024 and 13.6% more than in pre-pandemic 2019. Travel and tourism accounted for 10.3% of the global economy, up from 10% in 2024 but still below the 10.5% recorded in 2019. In 2025, the sector supported a total of 371 million jobs worldwide (10.9% of jobs), compared to 356.6 million (10.6%).
As for Ukraine, last year tourism accounted for 5.2% of GDP, reaching UAH 413.1 billion ($10.3 billion), which is 15.2% more than in 2024, but 33.4% less than in 2019.
According to Yakimenko, the average vacation check in Ukraine is already growing, our compatriots travel less often but go for longer periods due to complex logistics, and more often choose more comfortable hotels and better infrastructure. “Many customers consciously avoid mass budget resorts and destinations with many Russian tourists, even if it is more expensive. After prolonged stress, people want a full rest and emotional recovery, so they are willing to invest more in one trip,” she says.
There is a trend toward job recovery: in 2024, 766,700 people were employed in the industry (6.2% of all jobs in Ukraine), which is less than in 2019 (1.15 million, 6.9%), but 21.9% more than in 2024. At the same time, women make up the majority of those employed in the industry — 61.1% — and the share of young people under 24 is also significant (6.7%). Only 8% are high-paying jobs.
“Traditionally, more women work in tourism—this is a feature of the service industry. Young people are also actively involved, as the market requires flexibility and quick adaptation. At the same time, there is a growing focus on corporate social responsibility—companies are creating opportunities for veterans and internally displaced persons,” Yakimenko said, outlining labor market trends.
By the end of 2025, foreign tourists will have brought 58 billion hryvnia ($1.4 billion) to the domestic economy, which is one and a half times more than in 2024, but 61.3% less than in 2019. Domestic tourism is more stable – in 2025, it generated UAH 287.2 billion ($7.2 billion), which is 11.6% more than in 2024, but 16% less than in 2019. Overall, foreign visitors accounted for only 12.6% of the total in 2025. Business tourism also accounts for a small share (5.3%), with leisure tourism accounting for the bulk of tourist traffic (94.7%).
According to WTTC forecasts for the next decade, the share of tourism in global GDP will remain stable at around 11.5%, the total volume will grow to $16.5 trillion, and the number of jobs will increase to 461.6 million.
As for Ukraine, according to the WTTC’s analytical conclusions, by 2035 the industry will generate about 6.1% of GDP, with an estimated volume of $16.1 billion. Between 2026 and 2035, up to 400,000 new jobs will be created, bringing the total number of jobs to 1.16 million. In terms of revenue, foreign visitors could bring in $4.8 billion in 2035, while domestic visitors could bring in $8.7 billion.
According to Yakimenko, the trends that intensified in Ukraine after 2022 will continue. In particular, quiet resort destinations, beach and wellness vacations are now more popular, there is less spontaneity (the demand for short trips of up to 3 days and hot tours has completely disappeared), and the share of solo trips has increased. Themed trips are also popular (fitness tours, gastronomic tours, trips with influencers, retreats, etc.). “Separately, we see the prospect of developing inclusive tourism: our agency is actively researching this area and forming a list of hotels and destinations that are convenient for people with disabilities, because after the war, the demand for accessible recreation will only grow,” said Yakimenko.
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%.
The International Monetary Fund (IMF) has worsened its forecast for real gross domestic product (GDP) growth for this year from 3-4% to 2.5-3.5% at the end of the fourth review of the EFF extended financing program, while improving its year-end inflation forecast from 8.5% to 8%.
“We are now seeing clear signs of a slowdown in growth due to deteriorating sentiment as military action develops and also due to power outages,” Gavin Gray, head of the International Monetary Fund (IMF) mission to Ukraine, said at a press conference on Friday evening after Ukraine’s tranche was disbursed.
Risks remain exceptionally high, he said, especially due to uncertainties related to the war and external financing.
According to a publication on the Fund’s website, for next year, expectations for Ukrainian economic growth have been worsened to 5.5% from 6.5%, while maintaining the inflation estimate of 7%.
The IMF also lowered its forecast of Ukraine’s nominal GDP for this year to UAH 7.49 trillion from UAH 7.75 trillion in its March review, and for next year to UAH 8.74 trillion from UAH 8.87 trillion.
In terms of GDP composition, the IMF slightly worsened expectations for net exports, while expecting a larger contribution from domestic demand, private consumption and investment compared to the March revision.
The Fund improved the inflation forecast for the end of this year to 8% from 8.5%, maintaining its expectations for its slowdown to 7%, 5.5% and 5% in 2025-2027, but lowered expectations for real income growth this year and next year: by 1.2 p.p. to 8.6% and by 1 p.p., respectively. – to 8.6% and by 1 p.p. to 6.8%. – to 6.8%.
Also, the fourth revision slightly worsened the unemployment estimate: to 14.8% from 14.5% this year and to 14.3% instead of 13.8% next year.
As for the budget, the IMF has increased the estimate of its deficit (excluding grants) – to 20.9% of GDP from 20.2% of GDP for this year, to 10.4% of GDP from 10.3% of GDP for 2025.
According to the document, expectations for external financing have been improved to 12.1% of GDP from 11.8% of GDP and domestic financing to 2.1% of GDP from 2% of GDP, which should be provided by banks, while the estimate of external financing for next year remained at 6.5% of GDP, domestic – 0.9% of GDP with a reduction in the participation of banks to 0.5% of GDP.
As reported, last year the Ukrainian economy, according to the State Statistics Committee, grew by 5.3% after falling by 28.8% a year earlier, and in the first quarter of this year growth amounted to 6.5%.
On April 25 this year, the NBU worsened the country’s GDP growth forecast for this year from 3.6% to 3%.
The government, when approving the draft state budget for the second reading in early November 2023, projected economic growth this year at 4.6%, but the Finance Ministry recently said it had been worsened to 3.5%, and First Deputy Prime Minister Yulia Sviridenko said in mid-June in Berlin that the forecast had been worsened to less than 4%.
Real gross domestic product (GDP) of Ukraine in the first quarter of 2022 fell by 15.1% compared to the first quarter of 2021 after growing by 6.1% in the fourth quarter of last year, the State Statistics Service published such a preliminary estimate on Thursday.
According to her, compared with the previous quarter (seasonally adjusted), GDP fell by 19.3%.
According to the State Statistics Service, in 2021, Ukraine’s GDP grew by 3.4% after a decline of 3.8% in 2020, its nominal volume amounted to about $200 billion.
The Ministry of Economy estimated the decline in GDP in the first quarter of this year at 16%. According to the World Bank, which predicts a decline in the Ukrainian economy this year by 45.1%, the Ukrainian authorities expect it to decline by 44%.
Ukraine’s GDP in 2022 will fall by 45.1%, the World Bank predicts, recalling that before the Russian invasion, it expected the Ukrainian economy to grow by 3.2% this year.
According to its Europe and Central Asia Economic Update amid the war unleashed by Russia and its consequences, in 2023 the Ukrainian economy is expected to recover by only 2.1%, which is also worse than previous expectations of 3.5%.
“Russia’s invasion of Ukraine has triggered a catastrophic humanitarian toll and severe economic contraction… The impact on poverty is also likely to be devastating, although it is hard to quantify at this stage. Based on the international poverty line of $5.50 per day, poverty is projected to increase to 19.8% in 2022, up from 1.8% in 2021, with an additional 59% of people being vulnerable to falling into poverty,” the World Bank said in the report.
According to the document, simulations using the most recent macroeconomic projection show that the share of the population with incomes below the actual subsistence minimum (the national poverty line) may reach 70% in 2022, up from 18% in 2021. In the absence of a massive post-war support package, this indicator would still be higher than 60% by 2025, the bank added.
According to the World Bank’s forecasts, private consumption in Ukraine this year will fall by 50%, while public consumption by 10%, and capital investment will drop by 57.5%. Exports of goods and services will be reduced by 80%, imports – by 70%, while the public debt to GDP ratio will increase from 50.7% to 90.7%. The forecast for the consumer price index is 15% with an increase to 19% next year.
World Bank experts expect this year a current account deficit of the balance of payments of 6.8% of GDP and its expansion to 16.8% in 2023, a fiscal deficit (non-military) – 17.5% and 26.5%, respectively.
Even for 2024, the World Bank predicts an acceleration of economic growth to only 5.8% with inflation of 8.4%
“In coming years, a major reconstruction effort is expected to push growth to over 7% by 2025 amid a slow restoration of productive and export capacity and gradual return of refugees. Still, by 2025, GDP will be a third less than its pre-war level in 2021,” the World Bank said.
The World Bank explains the absence of a strong rebound in economic growth in 2022-2023 by saying that the war has destroyed a critical amount of productive infrastructure—including rail, bridges, ports, and roads—rendering economic activity impossible in large swathes of areas. Goods trade has come to a grinding halt, as damaged transit routes prevent goods by land while the loss of access to the Black Sea cuts off half of Ukraine’s exports and 90% of its grain trade. The planting and harvest seasons have been disrupted, the World Bank said.
“The magnitude of the contraction, however, is subject to a high degree of uncertainty related to the duration and intensity of the war. Still, the repercussions are anticipated to reverberate beyond the short-term collapse in domestic demand and exports, as output is scarred by the destruction of productive capacity, damage to arable land, and smaller labor supply – especially if refugees are slow to return or choose to remain permanently outside Ukraine,” the World Bank said.
Learning losses from the pandemic are expected to be amplified by the war given the destruction of schools and disruption to schooling. The Bank, referring to UNICEF data, said that the war had displaced 4.5 million children – more than half of Ukraine’s estimated 7.5 million child population – likely disrupting education, setting back development goals, and eroding long-term potential growth prospects.
“With physical capital and vital assets destroyed and degraded, combined with scarring from the war and pandemic, the recovery will be more difficult without significant reconstruction efforts and capital flows,” the World Bank said.
