Ministry of Economy: Ukraine's GDP drops by approximately 1.2% in first two months of this year

According to Ukrinform, this was stated by Minister of Economy, Environment, and Agriculture Oleksii Sobolev during question time with the government.

According to him, Ukraine ended last year with economic growth of 1.8% and inflation of about 8%, but the winter of 2026 proved to be difficult.

“Economic activity in early 2026 remained subdued due to the consequences of intensified enemy attacks and unusually cold weather conditions, which caused production halts at some enterprises due to energy restrictions. Accordingly, according to estimates by the Ministry of Economy, there was a slight 1.2% decline in GDP over the first two months,” the minister noted.

He stated that the energy sector, the extractive industry, metallurgy, and transportation were hit hardest by the downturn. Also, several factors indicate that this decline is temporary.

In particular, certain sectors are already showing positive trends. Domestic trade grew by 13% in January, construction by 3%, and the manufacturing sector is also growing. Additionally, according to the National Bank, business sentiment improved in February, and goods exports continued to grow.

“We expect activity and positive trends to resume as the weather warms and energy supply improves,” Sobolev added.

However, he emphasized that businesses are currently facing their most challenging period since 2022 due to the war, energy issues, labor shortages, logistical difficulties, and limited access to financing.

In response to these challenges, the government is implementing five key support initiatives, including developing energy capacity, encouraging businesses to establish their own power generation through the Affordable Loans 5-7-9% credit programs, supporting domestic production and processing, labor market development, war risk insurance, and regulatory simplification.

He added that work is ongoing to attract investment, develop industrial parks, and expand access to international financing.

According to the Ministry of Economy’s forecast, GDP growth this year could reach about 2%, which is lower than the 2.4% figure set in the state budget.

As reported, stable consumer demand became the main source of economic growth in Ukraine in 2025 amid a decline in exports and electricity supply issues at the end of the year.

Photo: NBU