The European Commission's economic forecast, published on May 21, assumes that the war will continue to exert a severe impact on the Ukrainian economy throughout 2026. According to Brussels, Ukraine's full recovery will be achievable only under a scenario that sees the launch of large-scale reconstruction in 2027. This is reported by Dengi.ua with reference to data from the EU's economic report.
The document notes that ongoing Russian aggression remains the primary source of pressure on the Ukrainian economy. In particular, continuous attacks on critical infrastructure facilities create ongoing challenges for the energy supply.
At the same time, the European Commission avoids drawing political conclusions regarding the timing of the war's end or the prospects for negotiations. The report focuses exclusively on a macroeconomic scenario in which military risks remain the decisive factor for the Ukrainian economy throughout the 2026–2027 forecast period.
According to the forecast, Ukraine's GDP growth in 2026 will amount to just 1.5%. Economic dynamics will be constrained by security concerns, damage to energy infrastructure, logistical and supply chain bottlenecks, labor shortages, and rising global oil prices. Concurrently, domestic consumption, defense spending, and investments in reconstruction projects are expected to support the economy.
For 2027, Brussels forecasts an acceleration of economic growth to 4%, but this figure is directly contingent upon the launch of large-scale reconstruction efforts across the country. The European Commission believes that investments in rebuilding, the gradual easing of the personnel deficit, and fewer export restrictions will partially offset any subsequent reduction in defense spending.
Inflation, according to European Commission estimates, will reach 9.3% in 2026. This will be driven by higher energy prices, rising labor costs, and the ongoing impacts of the war on production capabilities. In 2027, inflation is projected to remain elevated at around 9%, as economic recovery and pent-up consumer demand continue to sustain upward price pressures.
The forecast also explicitly highlights critical challenges facing the labor market. Due to mobilization, population migration, and acute regional imbalances, skills shortages will persist, causing unemployment to decline at a slow pace. Consequently, businesses will face a further increase in labor costs and ongoing difficulties in sourcing qualified employees.
Ukraine's public finances will also remain under severe strain, according to Brussels' assessment. In 2025, the budget deficit reached 19.5% of GDP amid increased defense spending, payments to the military and state subsidies. In 2026, the figure may fall to 13.3% of GDP, and in 2027 - to 9.2% of GDP, if defense spending will be gradually reduced.
