Tuesday, 26 August 2025
A new OECD Economic Survey finds that Ukraine’s economy has remained resilient despite the ongoing challenges caused by Russia’s invasion, with continued reform efforts seen as critical for long-term recovery and growth.
The report projects GDP growth of 2.5% in 2025 and 2.0% in 2026, following an estimated 2.9% expansion in 2024. However, further improvements could depend on investment levels and the return of displaced Ukrainians if the security situation stabilizes. Inflation is expected to stay high at 13.2% this year before falling to 7.1% in 2026. The OECD recommends that Ukraine’s monetary policy remain focused on anchoring inflation expectations and guiding inflation back to the National Bank’s 5% target.
To cover wartime defense spending, currently around 25% of GDP, Ukraine’s budget deficit is projected to approach 20% of GDP, with public debt rising to an estimated 116% of GDP by 2026, up from 49% in 2021. The OECD highlights the need to improve spending efficiency, strengthen tax collection, and modernize tax administration, particularly through digital tools, to create space for public investment in reconstruction.
Labour shortages caused by mobilization, displacement, and long-term demographic trends are a major challenge. The OECD suggests steps to reintegrate demobilized military personnel and displaced persons into the workforce, support returning emigrants, and increase women’s labor market participation by removing restrictions such as bans on shift work for mothers with young children.
To improve productivity and attract investment, Ukraine is encouraged to simplify regulations, promote competition, modernize corporate governance and insolvency frameworks, and ease tax compliance burdens.
Alongside the economic survey, the OECD released its Integrity and Anti-Corruption Review, which acknowledges Ukraine’s progress in building an anti-corruption framework comparable in many areas to OECD standards. Notable improvements include measures on conflicts of interest, political financing, and corruption risk management in public institutions.
However, the review notes gaps in areas such as the tracking and implementation of audit recommendations, the practical registration of private political donations, and whistleblower protections. It also highlights the need to finalize a draft lobbying law to increase transparency and prevent undue political influence.
The OECD concludes that while Ukraine has made significant strides, especially under wartime conditions, maintaining momentum on reform will be essential for rebuilding the economy, boosting public trust, and supporting post-war recovery.
Source: OECD
