According to the results of the first two months of 2026, Ukraine’s gross domestic product (GDP) decreased by approximately 1.2%. Despite this, the government expects economic activity to recover in the near future. Last year, the country’s economy grew by 1.8% with an inflation rate of around 8%, but the winter of 2026 was extremely challenging for the domestic economy.
This is reported by Business • Media
“We expect that activity and positive dynamics will resume with the warming and improvement of energy supply,” explained Sobolev.
Problematic Sectors and Positive Trends
The most significant decline was recorded in the energy sector, mining, metallurgy, and transportation. At the same time, several sectors are already showing signs of recovery. For instance, the volume of domestic trade increased by 13% in January, construction grew by 3%, and the manufacturing industry continued its positive trend. According to the National Bank of Ukraine, business expectations improved in February, and goods exports are demonstrating stable growth.
Economic Development Forecasts for 2026-2027
According to the updated macroeconomic forecast by investment company Dragon Capital, Ukraine’s GDP growth rate may slow down to 1.5% in 2026 and to 0.5% in 2027. The main scenario is based on the assumption that intense hostilities will continue in 2026-2027, including attacks by the Russian Federation on critical infrastructure, which will lead to an increase in the average annual electricity deficit to 10%.
At the same time, the volume of international support for Ukraine will remain significant – it is expected that the country will receive about $95 billion in external financing in 2026-2027. This will allow for an increase in military spending to $125 billion in 2027 and strengthen the country’s defense capabilities. The defense-industrial complex will remain a key driver of the economy, while other sectors will feel the negative impact of the energy crisis and labor shortages.
Annual inflation is projected to be 6-8% in 2026 and reach 7.1% by the end of the year, with a further decrease to 5.2% in 2027. The external trade deficit will increase to $57 billion in 2026 and decrease to $52 billion in 2027, while the budget deficit will remain around $50 billion over the two years. The national debt will stabilize at approximately 93% of GDP.
In the event of an alternative scenario where a sustainable ceasefire is achieved in mid-2026, Ukraine’s economy could grow by 3.5% in 2026 and by 5% in 2027.