Ukraine's economy enters recession: National Bank forecasts 0.4% fall in GDP

The National Bank of Ukraine (NBU) expects the Ukrainian economy to shrink by 0.4% in 2026, revising its earlier forecast of 1.8% growth.

Source: NBU Head Andrii Pyshnyi during a monetary policy briefing on 29 October

Details: Pyshnyi cited intensified Russian attacks on Ukrainian businesses and the blockade of maritime exports as the main reasons for the revised forecast. The escalation of the war has led to a 0.5% decline in GDP in the third quarter of this year.

Quote: "This downward trend has been driven primarily by the effects of the blockade of seaports and Russian attacks on production facilities and logistics. Metallurgical and ore-mining companies suffered the greatest losses. Meanwhile, performance also deteriorated in other industrial sectors, trade and agriculture."

Details: The bank estimated that the intensification of Russian attacks on businesses alone had reduced GDP by 1.9 percentage points.

"Given the extent of the damage caused, the NBU forecasts a slow recovery in economic growth in 2027-2028. Economic activity will be boosted by public and private investment in the defence industry, the establishment of domestic weapons production financed through the Ukraine Support Loan, and projects to recover critical infrastructure, among other things," Pyshnyi said.

Background: Earlier, the Ministry of Economy reported that Ukraine's steel production fell by 80% in September following Russian attacks that had hit seven blast furnaces: five at facilities belonging to Metinvest and two at ArcelorMittal.

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