Economist and financial analyst Oleksiy Kusch warns that Ukraine faces the threat of stagflation in 2025, also known as the “death spiral.” This phenomenon is characterized by a significant rise in inflation alongside a decline in gross domestic product (GDP).
This is reported by Business • Media
“How close is our economy to the ‘death spiral’? In the first quarter of 2025, real GDP grew by 0.5% year-on-year. This is nearly zero growth, with the risk of transitioning to zero or even negative dynamics in the second quarter of the current year. The consumer price index in 2025 (compared to the same period last year) was 14% in April,” noted Kusch.
Factors Leading to Recession
Several factors have contributed to the threats of an internal recession, including the lack of an effective industrial policy concept, a monetary policy not focused on the goal of economic growth, and the absence of a comprehensive development model adapted to wartime conditions.
“If urgent measures are not taken, we may face a gradual cooling of the economy by summer,” emphasized the expert.
State of Industry
At the same time, if we look at industrial production, stable economic processes are observed only in the defense sector. Meanwhile, the “rear economy” is gradually dying under the pressure of rampant inflation and rising energy resource prices, summarized Kusch.
“The ‘rear economy’ is gradually dying in the flames of rampant inflation and rising energy resource prices.”