IMF Downgrades Ukraine's Economic Growth Forecast for 2026

The International Monetary Fund has downgraded its forecast for Ukraine's economic growth in 2026 and raised inflation expectations. In the baseline scenario, the IMF expects the war to end by the end of 2026; however, the consequences of the conflict have proven to be stronger than anticipated. The forecast for real GDP growth has been reduced from 1.8-2.5% to 1-1.6%, inflation by the end of the year has been raised from 7.5% to 10.5%, and the current account deficit excluding grants has increased from $44.4 billion to $52.2 billion. International reserves are expected to be at $65.5 billion by the end of the year. The main support for the economy is expected to come from consumer spending due to rising wages. In the negative scenario, the IMF expects GDP growth to be only 0.5% annually in 2026-2028, inflation in 2026 could reach 12.5%, and the budget deficit excluding grants will amount to 23.5% of GDP. The total need for additional financing in this scenario will rise to $149.5 billion. Hetmansev noted that 2026 has started worse for the Ukrainian economy than expected, but agreements with the EU have reduced the risk of a lack of external financing.

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