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Ukraine's GDP growth slows due to Russian missile strikes and power shortages

Ukraine's GDP growth slows due to Russian missile strikes and power shortages Photo: Ukraine's economy has slowed due to Russian rocket attacks and electricity shortages (Getty Images)
Author: Liliana Oleniak

In May 2024, Ukraine's GDP grew by 3.7% compared to May last year. As a result, in January-May 2024, GDP growth is estimated at 4.3%, according to the Ministry of Economy of Ukraine.

"The increase in the intensity of hostilities, Russian shelling of infrastructure facilities, and electricity shortages unfortunately hampered Ukraine's economic growth in May this year," says First Vice Prime Minister and Minister of Economy Yulia Svyrydenko.

According to her, GDP growth continued due to high exports in the context of stable operation of the Ukrainian sea corridor, as well as high demand for construction services, which is supported by financing for infrastructure restoration.

According to the Ministry, high-security risks and the destruction of energy infrastructure remain the key unresolved issues.

"Restoration of the energy sector will require time and resources, which, according to forecasts, may slow down the pace of recovery of production activity. Logistical problems and a difficult situation on the labor market due to high migration also remain negative factors for the economy," the Ukrainian Ministry of Economy says in a statement.

Forecasts for Ukraine's GDP

According to forecasts by the IMF, the World Bank, the EBRD, and the European Commission, Ukraine's economy is expected to grow by 3% in 2024 after growing by 5.3% last year.

The National Bank of Ukraine has downgraded its economic growth forecast to 3.0% due to the effects of Russia's large-scale attacks on Ukraine's energy infrastructure.