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Ukraine’s economy is starting to overtake Russia in key indicators, despite contracting by a quarter of its 2021 level. According to The Economist, the National Bank of Ukraine forecasts GDP growth of 4% in 2024 and 4.3% in 2025. The hryvnia is stable and interest rates are at 13.5%, their lowest level in 30 months.
By comparison, Russia faces growing economic challenges: the Central Bank’s key rate could reach 23% to stabilize the ruble, banks are under pressure, and the GDP growth forecast for 2025 is only 0.5-1.5%.
Ukraine, however, faces a number of challenges: war, lack of resources and external factors such as the possible impact of Donald Trump’s policies.
Following Russia’s rejection of a grain deal in July 2023, Ukraine opened its own maritime corridor, providing exports of grain, metals and minerals. This was an important step to conserve resources and support the economy, especially thanks to Western aid.
But a challenging period lies ahead. The electricity deficit could reach 6 percent in 2025, falling to 3 percent in 2026 thanks to imports from the EU and local innovations such as biogas production.
The labor problem remains critical: war and migration have reduced the labor force by 20%. Vacancies far exceed the number of applicants, making it difficult to balance economic and military needs.
The financial deficit is also growing: by 2025 it will amount to 20% of GDP. Almost the entire amount, $38 billion, is expected to be covered by external financing. Aid from the G7 countries and frozen Russian assets play a key role, but the U.S. withdrawal of support could lead to a financial crisis as early as 2026.
Despite everything, Ukraine shows that it can not only survive, but also move forward, balancing challenges and opportunities.
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