Ukraine’s real GDP grew by 0.7% y/y in Q2 – NBU

NBU notes impact of weaker harvest and war on economic dynamics

In Q2 2025, Ukraine’s real GDP grew by 0.7% year-on-year and by 0.2% compared to the previous quarter (seasonally adjusted figure). According to the National Bank, citing data from the State Statistics Service, the growth rate was lower than forecast (+1.1% y/y) and slowed down compared to the first quarter (+0.9% y/y).

The key factors holding back economic activity remain the consequences of the war – the loss of people, territories, production capacity, and critical infrastructure. The decline in agriculture had a significant impact on the results. The agricultural sector’s GDP fell by 23.4% y/y due to the late start of the harvest and unfavorable weather conditions. This led to a negative contribution of the sector to GDP growth.

At the same time, steady domestic demand supported the economy. Private consumption became the main driver of GDP growth, adding 5.5 percentage points. Growth in final household consumption accelerated to 9% y/y. On the other hand, investment activity declined, with gross fixed capital formation falling by 2.5% y/y after significant growth in Q1.

Against the backdrop of limited demand for agricultural products, imports grew more slowly, while exports picked up slightly thanks to shipments to the EU and increased activity in the metallurgical industry. This made it possible to reduce the negative contribution of net exports to GDP growth.

Among the sectors, energy (+5.1% y/y), construction (+12.5% y/y), and manufacturing (+2% y/y) stood out positively. At the same time, the decline continued in the extractive industry (-10.4% y/y) due to attacks on gas infrastructure, as well as in the financial sector (-21.7% y/y).

According to NBU estimates, economic recovery will continue in the second half of the year thanks to the harvest, growth in budget expenditures, and steady consumer demand. However, the intensification of Russian attacks on infrastructure poses serious risks to growth rates.

As a reminder, the World Bank forecasts that Ukraine’s economic growth will slow to 2% in 2025 from 2.9% in 2024. In 2026, the country’s GDP growth will also be 2% year-on-year, and it is expected to accelerate to 5% only in 2027.