The real Gross Domestic Product (GDP) of Ukraine increased by 2% in January 2025 compared to January 2024, while in December 2024, growth was recorded at 1.6% compared to the same period the previous year, as reported in the Monthly Economic Monitoring by the Institute for Economic Research and Political Consultations (IER).
"The main reasons for the accelerated growth are a smaller decline in agriculture, which currently reflects only livestock indicators, the absence of mass planned power outages, and an increase in private consumption. According to the Ministry of Agrarian Policy, real production in livestock slightly decreased. The cattle population has declined, while the situation in poultry farming is more favorable. According to IER's estimates, the real gross added value (GAV) in agriculture decreased by 0.9% compared to the previous year in January," the study notes.
It is emphasized that the approaching front and the complete closure of mines near Pokrovsk have negatively impacted the pace of economic recovery in Ukraine, leading to a decline in the mining industry.
At the same time, the situation with iron ore extraction remains positive. So far, according to IER's estimates, the real GAV in the mining industry decreased by 2.9% in January 2025 compared to the same period last year. However, the approaching front may have an even more negative impact on the mining industry's indicators in the coming months.
However, the absence of planned mass power outages positively influenced the indicators of the manufacturing industry. Additionally, there was favorable domestic demand for products from sectors focused on the domestic market. External demand also benefited metallurgy. Nevertheless, IER notes that January had a high statistical base. Overall, although some sectors showed a decrease in output volumes, the real GAV in manufacturing rose by 3% in January (compared to January 2024).
"The destruction of electricity generation by the Russians was not fully compensated by repairs and new generation. Furthermore, the demand for electricity this year was lower due to warm weather, and emergency power outages occurred as a preventive measure during shelling. As a result, according to our estimates, the real GAV in the sector decreased by 5.1% in January (compared to January 2024)," IER states.
Meanwhile, in trade, the real GAV continues to grow due to rising wages and social benefits. Consumption is also increasing against a backdrop of high inflation expectations. In January, the real growth of GAV in trade slowed to 4.9% (compared to the figure in January 2024). At the same time, due to the halt in the transit of Russian gas to the EU, the real GAV in transport decreased by 1.1% compared to the same period last year.
IER added that Russia continues to attack Ukraine's port infrastructure. At the end of January and the beginning of February, there were several shellings of the ports of Odesa, Izmail, and Chornomorsk, resulting in damage to port infrastructure. In January, Ukraine exported 6.6 million tons of goods via sea transport.
In January, 14 million tons of cargo were transported by rail, which is on par with December 2024 and 1% less than in January 2024. Of this, 5.5 million tons were transported to ports and 2 million tons to the western border. The largest share of transportation consists of ore (44%), grain (38%), and ferrous metals (6%).
Additionally, in the first month of 2025, exports of goods fell by 6% compared to January 2024 and by 4% compared to December 2024, totaling $3.18 billion. Agricultural exports continued to decline compared to previous months amid decreasing stocks. Agricultural exports fell by 18% year-on-year (compared to January 2024) to $1.85 billion due to lower yields and reduced carryover stocks at the start of the marketing year. The physical volumes of exports of key agricultural products decreased even more, but high prices and gradual diversification of agricultural exports supported export revenues.
Goods imports in January fell to $5.55 billion, reflecting a seasonal decline in imports compared to December volumes. Year-on-year, imports increased by 9% (compared to the same period last year). Imports of machinery and equipment amounted to $2.16 billion and increased by 17% compared to January 2024, particularly due to a sharp rise in the import of energy equipment ($431 million in January 2025 compared to $85 million in January 2024). Meanwhile, car imports decreased.
Alongside other factors, IER forecasts a real GDP growth of 2.9% in 2025 and 3.2% in 2026.
As reported by the Ministry of Economy, Ukraine's GDP in January 2025 grew by 1.5%, supported by the construction sector, manufacturing industry, and domestic trade.
Additionally, the World Bank (WB) in its "Global Economic Prospects" published on January 17 downgraded the GDP growth forecast for Ukraine in 2025 to 2% from 6.5% in the June report, but improved it for 2026 to 7% from 5.1%.
The National Bank of Ukraine also revised its forecasts, taking into account security risks and the challenging labor market situation, lowering its real GDP growth forecast for 2025 to 3.6%.