Duration of Ukraine war and prospects for peace talks – World Bank assesses

The document stated that discussions of a potential ceasefire between Russia and Ukraine began at the beginning of the year, but the prospects for a long-term settlement remain uncertain.

It is forecasted that Ukraine's economy will grow from 2.0% in 2025 to 5.2% in 2026. The acceleration of growth takes into account the World Bank’s expectation that the Russian invasion "extends through end-2025, with active hostilities winding down afterward."

The projected growth in 2026 assumes a surge in investment in production and reconstruction, while the recovery of exports is expected to remain limited due to a challenging trade environment and economic uncertainty. Reconstruction and recovery costs are estimated at $524 billion, which is nearly three times the country's GDP in 2024.

According to the World Bank, without a solid peace agreement, continued or intensified invasion may further weaken Ukraine's economy and sustain high geopolitical tension.

Disruptions in financial flows to Ukraine will intensify these risks since the country's external financing remains heavily dependent on continued support from the EU and the USA, the forecast says.

At the same time, support from Europe and the USA plays a key role for Ukraine. The World Bank assesses EU support as significantly higher.

The World Bank also lowered its forecast for global growth in 2025 by 0.4 percentage points to 2.3%, "mainly due to weaker projected activity in major economies in the region."

Forecasts for Ukraine

It should be recalled that, according to Fitch Ratings' assessment, the US administration's declared goal to end the war may lead to a negotiated ceasefire, although the signing of a peace agreement is unlikely.

In March, the IMF updated its baseline scenario, according to which Russia’s war against Ukraine will end at the end of 2025. This scenario forecasts Ukraine's economy to grow by 2–3% in 2025 and accelerate to 4.5% growth in 2026.