Ukraine’s Economy Maintains Growth Despite War and Mounting Security Pressures

Ukraine’s economy continued to expand in 2025 despite the ongoing war and persistent Russian attacks on critical infrastructure, underscoring the country’s economic resilience amid one of the most challenging periods in its modern history.

According to Ukraine’s Ministry of Economy, gross domestic product (GDP) grew by 2.2% in 2025, even as security risks remained elevated and repeated strikes targeted energy and transport networks across the country. The ministry described the performance as a reflection of the economy’s ability to adapt under wartime conditions.

In a statement published on its official Telegram channel on Friday, the ministry said several key sectors played a decisive role in sustaining growth, notably defense industries, pharmaceuticals, and metals, which benefited from both domestic demand and external support.

Despite the pressures, Ukrainian authorities remain cautiously optimistic about the outlook. The Ministry of Economy forecasts GDP growth of 2.5 percent in 2026, maintaining a more upbeat assessment than the World Bank, which recently revised down its projection for Ukraine’s economic growth to 2 percent.

Speaking during a government question-and-answer session reported by the Ukrinform news agency, Economy, Environment and Agriculture Minister Oleksii Sobolev acknowledged the divergence in forecasts, attributing it to differing assumptions about the duration of the war.

“The World Bank had previously assumed that the war would end this year, which resulted in higher growth expectations for 2026,” Sobolev said. “After revising those assumptions, its forecast became more conservative. The Ministry of Economy, however, continues to expect growth of around 2.5 percent next year.”

Sobolev added that Ukraine could see a noticeable acceleration in economic growth in the second half of the current year, driven by increased industrial activity and external assistance. He argued that this trend would set Ukraine apart from Russia, whose economy, he said, is experiencing a steady slowdown.

“Russia’s economic growth is declining month by month and is expected to approach zero,” Sobolev noted. “By contrast, Ukraine’s economy is expected to grow by 3 to 4 percent in September and October, reflecting stronger momentum in the latter part of the year.”

The contrasting trajectories, Ukrainian officials argue, highlight the effectiveness of Kyiv’s wartime economic management, as well as continued international financial and military support. While energy shortages, labor constraints, and infrastructure damage remain major obstacles, the government insists that targeted investment and sectoral resilience are helping to prevent a deeper contraction.