The ICU investment group has worsened its forecast for Ukraine’s economy. Analysts expect real GDP to shrink both this year and in 2027.

This is stated in ICU’s macroeconomic review for October. The group calls the current period the most difficult for the economy since 2022.

What is dragging the economy down

According to the analysts, businesses are losing assets because of massive russian attacks on industrial enterprises, warehouses and transport infrastructure. The damage is compounded by high uncertainty and the halt of Black Sea shipping routes.

A large share of the damage done will not be compensated while the war continues.

ICU investment groupmacroeconomic review, October 2026

Industrial output fell by 6.1% year on year in August and probably even more in September. Construction and transport are shrinking too.

How much GDP will fall

This year real GDP will decline by 0.5–0.7%, according to ICU. Earlier the group expected growth of 0.8%.

In 2027 the decline could reach 1–2%. Large industrial plants will stand idle for longer, and farmers may cut grain sowing because of limited opportunities to sell the harvest.

At the same time, the analysts expect the decline to be limited, because the structure of the economy has changed during the years of war: the share of services and the defence sector has grown significantly. If the security situation improves significantly, a contraction next year can be avoided.

ICU calls 2027 the biggest challenge for the budget: more than 25 billion dollars will have to be found to finance the deficit.

As a reminder, the same analysts named the dollar rate to expect at the end of 2026 and 2027.

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