Ukraine's GDP grows by 1.1% in first 2M – First Deputy PM
Ukraine's gross domestic product (GDP) grew by 1.1% in January-February 2025, according to First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko.
"Although this is moderate growth, it remains a positive signal of economic resilience. Despite the ongoing challenges of war, inflation, and infrastructure destruction, Ukraine's economy is gradually recovering and showing signs of growth," she wrote on the social media platform X (formerly Twitter) on Tuesday.
According to Svyrydenko, several factors contributed to this growth. A key driver was the restoration of critical infrastructure, as significant state funds were allocated to repairing damaged facilities, conducting large-scale reconstruction, and expanding housing development. Additionally, increased activity in the metallurgy sector played a role, with production of pig iron, steel, and rolled products continuing to rise.
The expansion of Ukraine's defense-industrial complex also contributed to GDP growth. The purchase of domestically produced defense equipment, the scaling up of production capacities, and the fulfillment of defense contracts have supported industrial and technological development. Furthermore, the implementation of business recovery and development programs has bolstered the manufacturing sector as a whole.
However, challenges persist. The key obstacles to economic growth include a shortage of skilled labor, limited access to financing, damage to the energy infrastructure, rising energy costs, and logistical constraints, according to the statement.
"Ukraine's economic recovery is not without hurdles, but the signs of resilience are undeniable. The government's focus on infrastructure development, industrial growth, and defense production has laid the groundwork for economic stability, even amid war. With continued investment, strategic reforms, and international support, the path to recovery remains solid," Svyrydenko concluded.
As reported, on February 28, the International Monetary Fund (IMF) downgraded its 2025 economic growth forecast for Ukraine, lowering it by 0.5 percentage points (pp) compared to its previous projection, now expecting GDP growth in the range of 2-3%. Other institutions have also revised their forecasts downward: the European Bank for Reconstruction and Development (EBRD) cut its 2025 projection from 4.7% to 3.5%, the World Bank revised its estimate from 6.5% to 2%, and the National Bank of Ukraine (NBU) lowered its forecast from 4.1% to 3.6%. Meanwhile, Ukraine's 2025 state budget is based on a projected GDP growth of 2.7%.