The war will last longer: The World Bank has revised its economic outlook for Ukraine, projecting a more challenging situation ahead.

The World Bank forecasts a slowdown in Ukraine's economic growth to 2.0% in 2025. This prediction is based on the assumption that the war will continue throughout the year.

This information is reported by RBK-Ukraine citing the Global Economic Prospects of the World Bank for January 2025.

In June of last year, the World Bank predicted an average GDP growth rate for Ukraine of 5.8% per year for 2025-2026, "provided that active combat operations continue throughout 2024 and subsequently become moderate."

According to the World Bank's current estimates, growth in Ukraine is expected to slow to 3.2% in 2024, reflecting issues such as reduced energy capacity and winter power outages that have hindered trade and industrial production growth. Despite these challenges and ongoing attacks on infrastructure, the economy has shown growth.

"It is projected that Ukraine's growth will slow to 2% in 2025, assuming that active combat operations continue throughout the year. A steady recovery of 7% is anticipated in 2026, assuming the cessation of active combat operations, supported by investments in consumption and reconstruction," the report states.

According to the World Bank, over the past year, the conflict has directly affected 41% of Ukraine's population, highlighting significant human and economic losses. Defense spending accounted for about one-third of GDP in 2023.

The initiation of negotiations for EU membership and the Ukraine Plan under the EU funding mechanism (financial support for the period 2024-2027) serve as important pillars for joining the EU, the World Bank notes.

It is worth noting that the IMF has updated its baseline scenario, according to which Russia's war against Ukraine will end by the end of 2025. This scenario predicts Ukraine's economic growth in 2025 at 2.5-3.5% and an acceleration of growth to 5.3% in 2026.