Economy posts best growth result in a year in Q3

GDP growth accelerates: Ukraine's GDP grew 2.1% on a year-on-year basis in Q3, following 0.8% growth in the previous quarter. Q3's reading was the strongest since Q3 2024, driven by a strong fiscal impulse and improved energy conditions compared with a year earlier. In seasonally adjusted quarter-on-quarter terms, GDP expanded 0.8% in Q3, following 0.2% growth in the prior quarter.

Government spending buttresses economic growth: Compared to the previous quarter's data, readings in Q3 improved for government consumption (+12.2% in annual terms vs -0.5% in Q2), fixed investment (+11.5% vs -2.5% in Q2), exports of goods and services (-15.4% vs -15.7% in Q2) and imports of goods and services (+10.5% vs +4.5% in Q2). In contrast, the reading for private consumption worsened in Q3 (+6.7% vs +9.0% in Q2). Government consumption led the acceleration, supported by substantial international financing, and fixed investment rebounded, boosted by construction, agricultural processing and defense-related projects. In contrast, net exports weighed on GDP growth, as exports continued to decline amid low agricultural inventories, weak demand for metallurgical products and new terms of trade with the EU. Moreover, imports surged on increased purchases of machinery and metals due to a ramp-up of defense capabilities and infrastructure reconstruction.

Economy to expand at a faster rate: Year-on-year growth is expected to strengthen in the final quarter of 2025, supported by a favorable base effect, a solid harvest and elevated government spending. Looking ahead at 2026, the economy should gain further momentum compared to 2025: Exports are set to rebound, while EU financing and lower inflation will likely provide tailwinds to fixed investment and private consumption. Still, economic growth will remain constrained by high imports and continued disruptions to energy, logistics and broader infrastructure from Russian strikes.

Panelist insight: Commenting on the outlook, Andrew Matheny and Johan Allen, analysts at Goldman Sachs, stated: “Forecasts for Ukrainian growth are sensitive to assumptions about the likely duration of the Russian war and the credibility and durability of a potential peace deal. We do not take a view on the course of the war or if/how it may be resolved but have laid out two scenarios for Ukraine’s economy: 1) a baseline, involving a de facto resolution to the war over time, entailing a 5-6% peace dividend in year one and 3% trend growth thereafter; and 2) an upside growth scenario, with a rapid and credible de jure resolution to the war that implies an 8-10% peace dividend and 5% trend growth rate. Nevertheless, as time passes, risks become tilted towards a later resolution to the war, implying less return migration and a smaller peace dividend.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Ukrainian GDP projections for the next ten years from a panel of 34 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Ukrainian GDP.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Ukrainian GDP projections.

Want to get access to the full dataset of Ukrainian GDP forecasts? Send an email to info@focus-economics.com.