Victory over the downturn: GDP figures exceed expectations

The National Bank of Ukraine (NBU), based on data from the State Statistics Service (Derzhstat), recorded growth in real GDP in the third quarter of 2025 of 2.1% year‑on‑year (y/y). Compared with the previous quarter, growth was 0.8% in seasonally adjusted terms. These recovery rates are in line with the NBU’s own forecasts and indicate the economy’s resilience.

Main factor: Government spending backed by allies

The NBU emphasizes that the largest factor behind growth was government consumption. It rose by 12.2% year‑on‑year, contributing 4.1 percentage points to GDP growth.

This powerful "fiscal impulse" was made possible by substantial international financing.

Also, gross fixed capital formation increased by 11.5% y/y. This provided a positive contribution of 2.2 percentage points, as funds were directed not only to a revival of construction activity but also to increased investment in agricultural processing and defence‑sector projects. Significant capital expenditures from the budget were among the highest since the start of the full‑scale invasion.

Sector drivers: How defence and energy are pulling the economy

Economic results by activity were uneven, but the rise in budgetary spending directly supported key areas:

• Public administration and defence sector: gross value added (GVA) grew by 15.1% year‑on‑year.
• Budgetary spheres: positive dynamics persisted in education, healthcare and social assistance.
• Energy: the GVA of the energy sector accelerated to 6.7% y/y thanks to an improved situation compared with the same period in 2024.

Context: Risks and NBU forecasts

At the same time, the negative contribution of net exports to GDP growth widened to 8.9 percentage points. This was caused by a reduction in export volumes (due to limited stocks of agricultural products and weak demand for the mining and metallurgical sector) and rapid import growth. Imports rose amid active procurement of goods to strengthen defence capability and rebuild infrastructure.

Optimistic forecast: The NBU expects that in the fourth quarter of 2025 the economy’s recovery will accelerate to 3.4% thanks to further expansion of budgetary stimulus and private consumption. In the following years a moderate pick‑up to 2–3% is forecast as harvests increase and investment in reconstruction and the defence complex grows.

Golden rule: The course of the full‑scale war remains the main risk, but the economy is demonstrating its ability to adapt, supported by fiscal strength.