Cabinet revisits Ukraine's GDP growth forecast due to shelling and port blockade

The Cabinet of Ministers is revising Ukraine's GDP growth forecast for 2026 downward due to Russian strikes on energy and logistics infrastructure, as well as problems with port operations. The direct impact of shelling could cost the economy up to 0.5 percentage points of growth.

This was stated by the Minister of Economy and Environment Oleksandr Kravchenko, reports NV Business

According to him, the government's baseline forecast projected Ukraine's GDP growth in 2026 in the range of 1-3%, but these expectations are now being revised downward.

Among the main negative factors, the minister named the destruction of energy and logistics infrastructure, as well as the blockade of ports, which significantly limits the country's export capabilities.

Shelling may take up to 0.5 p.p. of growth

Kravchenko estimated the possible negative effect directly from Russian shelling in 2026 at up to 0.5 percentage points of GDP.

Ukraine has already started the year with a shrinking economy. According to the minister, in the first quarter GDP fell by 0.6% due to large-scale destruction of energy infrastructure.

In the second quarter, the economy managed to fairly quickly compensate for a significant part of the fall, so by the end of the first half of the year Ukraine again returned to slight growth.

However, further dynamics will depend primarily on the scale of new Russian attacks, the state of the energy system, and the ability of exporters to use maritime logistics.

Government prepares for a difficult winter

Kravchenko said that the Cabinet should proceed from the possibility of worst-case scenarios during the next winter.

According to him, one of the main tasks of the government in the near future will be the preparation of anti-crisis plans for various development scenarios, including in case of new large-scale attacks on the energy system.

The minister expects that the next month of the Cabinet's work will be largely devoted to anti-crisis decisions. At the same time, the government does not plan to abandon long-term planning for economic recovery after the end of the active phase of the war.

For affected businesses, they want to expand loans and insurance

One of the key instruments for supporting companies affected by Russian strikes, the Ministry of Economy considers the expansion of preferential lending and war risk insurance.

In particular, Kravchenko advocated for expanding the state program "5-7-9%", including to larger enterprises.

According to him, the current budget capabilities are insufficient for war risk insurance at the necessary scales. Therefore, the Ministry of Economy, together with the Ministry of Finance and the Verkhovna Rada, is working on expanding the relevant program for 2027.

For this, they plan to increase budget funding and attract additional sources of funds.

Ukraine is preparing a strategy for investors

In parallel, the government is working on mechanisms to attract private capital for post-war recovery.

According to Kravchenko, Ukraine needs to identify priority sectors, simplify regulation for investors, deepen integration into the EU common market, and prepare concrete investment projects.

A separate direction should be the formation of an investment strategy that Ukraine can present to international donors and private investors.

Among possible instruments, the minister named the expansion of the Ukraine Facility, additional war risk insurance mechanisms, and equity funds supported by the European Union and other international partners.