Ukraine's economy will grow 5% if the fighting ends

(CLO) The European Bank for Reconstruction and Development (EBRD) predicts that Ukraine's economy could grow 5% next year if the parties reach a ceasefire. But the country's reconstruction prospects still depend on a lasting peace .

In a report released on February 27, the European Bank for Reconstruction and Development (EBRD) lowered its economic growth forecast for Ukraine this year to 3.5% from 4.7% previously, citing repeated attacks on the country's power plants and grid.

However, the EBRD said growth could rise to 5% in 2026 “provided a ceasefire is reached by the end of 2025.” The London-based bank has invested $6.2 billion in projects in Ukraine during the country’s three-year conflict.

Ukraine's economic outlook remains bleak without a lasting peace deal. Photo: EBRD

Beata Javorcik, chief economist at the EBRD, said it was prepared to support Ukraine's reconstruction if negotiations secured an end to the war. "We are ready to invest when the time comes," Ms Javorcik said.

While Washington welcomed the tentative deal with Kiev on exploiting Ukraine's valuable mineral resources, Javorcik praised the Zelenskyy administration's approach to getting the economy out of difficult circumstances.

“The positive point is that despite three years of war, the Ukrainian government has maintained macroeconomic stability,” said Ms. Javorcik. “That is a remarkable achievement.”

But when asked about the long-term prospects for Ukraine's economy, Ms. Javorcik pointed to EBRD analysis of two centuries of data, which showed that of the countries where wars occurred, half still suffered economic damage 25 years later.

“Recovery after conflict is not something that can be taken for granted,” said Ms. Javorcik. “A big part of that is that peace is elusive. Conflict often flares up again after a few years.”

“The significance of a resolution to this conflict for Ukraine will depend on how the situation stabilizes,” the EBRD chief economist added.

Quang Anh (according to The Guardian, WSJ, EBRD)

Source: https://www.congluan.vn/kinh-te-ukraine-se-tang-truong-5-neu-chien-su-cham-dut-post336377.html