In the second quarter of 2025, Ukraine’s economic growth slowed to 0.7% year-on-year. According to estimates from the National Bank, this dynamic is primarily due to seasonal factors and adverse weather conditions that affected the timing of crop maturation.
This is reported by Business • Media
Impact of War and Seasonal Factors
Among the main reasons for the slowdown in economic growth, the National Bank cites the consequences of the full-scale war: losses of population, territory, production capacities, and infrastructure. Moreover, the actual growth of real GDP turned out to be lower than the previous forecasts from the National Bank, which were included in the Inflation Report for July 2025 (1.1% year-on-year).
“The actual growth rates of real GDP were lower than the National Bank’s estimate published in the Inflation Report for July 2025 (1.1% year-on-year), primarily due to the more significant impact of adverse weather conditions on the timing of crop maturation.”
Private Consumption — The Driver of Recovery
The largest contribution to the recovery of the economy in the second quarter came from private consumption. Household spending on final consumption increased by 9% year-on-year, significantly exceeding the first quarter’s figure, where growth was only 1.6%.
The National Bank forecasts that economic recovery will continue in the second half of 2025. An increase in harvest collection, sustained domestic demand, and increased budget expenditures are expected to contribute to fiscal stimuli. At the same time, a deterioration in the security situation and intensified shelling of critical infrastructure may hinder economic growth.