Ukraine GDP growth slows to 0.5% in February – IER

According to the monthly economic monitoring data of the Institute for Economic Research and Policy Consulting (IER), Ukraine's real gross domestic product (GDP) in February 2025 increased by only 0.5% compared to February 2024, which is lower than the 1.3% growth recorded in January.

“The slowdown was due to a decline in several sectors as a result of the Russian attacks and increased business uncertainty, which dampened the recovery seen in other areas of the economy. In January, the GDP growth rate was 1.3%, based on revised data and a slightly adjusted calculation methodology,” the institute explained.

According to the IER press service, real gross value added (GVA) in the transport sector fell by 4.5% in February due to attacks on port infrastructure, compared with a roughly 1% drop in January caused by the lack of gas transit. Trade growth also slowed to 3.5% year-on-year.

The report mentions that Russian attacks on gas production and distribution infrastructure in the Kharkiv and Poltava regions, including both Naftogaz facilities and private companies, worsened conditions in the extractive industry. The sector had already seen a reduction in production due to the temporary occupation of several coal mines in the Donetsk region. As a result, real GVA in the sector fell by more than 5% year-on-year.

In manufacturing, GDP growth was held back by Russian attacks on industrial facilities and infrastructure, as well as planned power outages. As a result, the sector posted a modest 2.5% growth in February compared to February 2024.

“Real GVA in agriculture is estimated to have fallen by 1.1% year-on-year, reflecting the decline in livestock production. The agricultural data for the first months do not yet include crop production figures,” said Vitaly Kravchuk, a senior researcher at the IEI.

In addition, in February, Ukraine increased electricity imports by almost 30% compared to the previous month to 244,000 MWh, with the largest supplies coming from Hungary (35%) and Slovakia (30%). Compared to February 2024, electricity imports increased by 2.9 times.

The volume of rail freight transportation in February amounted to 12.3 million tons, which is 12% less than in January and 16% less than in February 2024. Of these, 4.2 million tons were sent to ports, and 2 million tons were sent to the western border. The largest share of the transported goods was ore (43%), grain (37%) and ferrous metals (6%).

On March 18, First Deputy Prime Minister and Minister of Economy Yulia Sviridenko reported that GDP growth for January-February 2025 was 1.1%.

Earlier, on February 28, the International Monetary Fund (IMF) downgraded its economic growth forecast for Ukraine in 2025, lowering it by 0.5 percentage points to a range of 2-3%. Similarly, the European Bank for Reconstruction and Development (EBRD) revised its forecast down from 4.7% to 3.5%, the World Bank from 6.5% to 2%, and the National Bank of Ukraine from 4.1% to 3.6%. However, the state budget for 2025 is based on a projected GDP growth rate of 2.7%.