The International Monetary Fund’s (IMF) updated projections for Ukraine outline two scenarios regarding Russia’s ongoing war.
The baseline scenario assumes the war will end by late 2025, while the downside scenario predicts it will continue until mid-2026, significantly affecting economic stability.
Under the baseline scenario, Ukraine’s GDP is expected to grow by 4% in 2024, an increase from earlier forecasts, and inflation is projected to rise to 10% due to factors like rising food prices and currency depreciation.
The IMF notes that investments in electricity generation and European imports have mitigated the effects of winter energy shortages.
For 2025, GDP growth is forecast at 2.5-3.5%, reflecting improved energy capacity and rising income levels amid easing price pressures.
In the downside scenario, a prolonged war would cause deeper economic shocks, including slower GDP recovery, higher inflation, and fiscal deficits exceeding 20% until 2026.
This scenario estimates an external financing gap of $177.2 billion, compared to $148 billion under the baseline, with international reserves remaining below IMF criteria until 2027.
On December 21, the IMF completed its sixth review of Ukraine's Extended Fund Facility, approving an additional $1.1 billion tranche.
The program will provide Kyiv with $15.6 billion in budget support over four years. Including the latest round of funding, the IMF has already disbursed $9.8 billion.
Abbey Fenbert
