According to according to “Ekonomicheskaya Pravda”, Ukraine’s real GDP growth accelerated to 8 percent by the previous August. The country’s Institute for Economic Research and Policy Consulting (IED) noted that the acceleration of economic growth was due to the dynamics of agricultural development, in particular, a later harvest. While GDP contracted by 0.5% in July due to a 26% drop in gross value added in the ag sector, a 37% increase in agriculture in August lifted the monthly GDP rate to 8%.
However, the IED cites other positive signals for the Ukrainian economy, which were reflected in the acceleration of GDP growth:
– The processing industry increased value added by 6% thanks to stable demand, a recovery in the food industry and defense procurement.
– Trade maintained a 3% growth rate thanks to timely wages and social benefits, as well as wage increases amid labor shortages.
– Electricity generation grew by 10% from a low base last year, when there were massive consumer outages.
The Institute also points out unfavorable factors of the Ukrainian economy:
– The extractive industry reduced value added by 7% due to the loss of coal mines, although this was partially offset by growth in construction materials production.
– Transportation reduced value added by almost 10% due to the stoppage of gas transit, the temporary cessation of oil transit, and reduced transportation by rail.
In mid-August, the Ukrainian government presented a forecast of economic and social development for 2026-2028, which outlined an expected real GDP growth of 2.7% in 2025. The consumer price index for this year is forecasted at 112.2% (on average to the previous year).
And the National Bank of Ukraine, despite a surge in GDP and export growth in August, expects a significant budget deficit of 22% of GDP in 2025.
