ED – this is bne IntelliNews's annual Ukraine OUTLOOK 2026 for the upcoming year, where we make a forward-looking assessment for all of the major Global Emerging Markets in Emerging Europe, Asia, Latin America, Africa and the Middle East, drawing on insightful reporting from our bureaus around the world.

What is on the agenda? What are the prospects for economic growth and what problems lie in store in the coming year? A detailed report that covers, business, economics, finance, energy, politics and the major sectors of the most important markets. ENDS

Ukraine’s economy remained under severe stress in 2025, with real GDP growth estimated between 1.6% and 2.5%, sustained only by public spending and a temporary construction surge. However, energy shortages, declining industrial output, and escalating trade deficits—especially with the EU, reaching a record $39.9bn—underscore the country’s growing economic fragility.

Grain exports and industrial capacity continued to shrink due to ongoing war damage and territorial losses. Inflation eased from 15.9% to 11.9% by September but remains elevated. The fiscal position remains precarious, with an estimated UAH600bn lost annually to the shadow economy and a budget deficit of €45–50bn, fully reliant on foreign aid.

Ukraine’s battlefield situation deteriorated sharply in late 2025. Russian forces captured more territory than at any point since 2022, with 701 km² seized in November alone, bringing the total occupied area to 19.3% of Ukraine’s territory. Western support has weakened, particularly from the United States, which provided no financial or military assistance in 2025. The EU is now Ukraine’s sole backer, though internal opposition is mounting as key funding proposals, including the €210bn Reparation Loan, failed to pass.

The EU has pledged €90bn in new aid but is struggling to meet Ukraine’s growing arms needs. Proposed defence funding packages have been blocked by member states amid rising public fatigue and the ascent of right-wing, anti-aid parties. These parties, now led by Hungary, Slovakia, and Czechia, have formed a growing bloc in the European Parliament aiming to curtail support.

Ukraine’s internal cohesion is fraying. Desertion in the armed forces surged, with over 115,000 AWOL cases pending by year-end, and nationalist strongholds such as Lviv reporting the highest levels of draft evasion. President Volodymyr Zelenskiy’s popularity has declined sharply following a $100mn Energoatom corruption scandal implicating his inner circle, including close associate Timur Mindich.

Zelenskiy’s perceived rollback of anti-corruption reforms in July triggered protests and EU backlash, leading to a downgrade in Ukraine’s EU accession progress. General Valerii Zaluzhnyi now leads in presidential polling, as pressure grows for elections under the Trump administration’s proposed 27-point peace plan.

Without a ceasefire or new inflows of foreign capital, Ukraine’s economic and political outlook remains highly uncertain going into 2026.

Read the full Ukraine OUTLOOK 2026 report here

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