**Ukraine’s Economy Stumbles: EBRD Lowers Growth Forecast**
The European Bank for Development and Reconstruction (EBRD) has revised its economic forecast for Ukraine, citing a slowdown in growth. The bank now predicts that Ukraine’s GDP will grow by 3.3% this year, down from the previous estimate of 3.5%.
This is not the first time the EBRD has lowered its forecast for Ukraine. In February, the bank cut its projection from 4.7% to 3.5%, citing a range of challenges including international trade tensions and a decline in agriculture, energy production, and trade.
**Tariffs Take a Toll**
Ukraine has been hit hard by tariffs imposed by US President Donald Trump on most countries around the world. The country faces a base 10% tariff on most imports, except for steel products which are already subject to 25% tariffs.
These tariffs have led to a decline in Ukrainian exports and a slowdown in economic growth. The EBRD has cited electricity shortages resulting from Russian attacks, weak harvests, and acute labour shortages as key reasons for the developments.
**Resilience in the Face of Adversity**
Despite these challenges, the EBRD has praised the resilience and adaptability of Ukrainian businesses. While some sectors have struggled, others have shown solid growth despite difficult conditions and ongoing conflict.
Ukraine was able to secure the external financing needs of its 2025 budget, receiving funds primarily from the EU’s Ukraine Facility program and the G7’s $50 billion loan covered by proceeds from frozen Russian assets.
**Global Economic Impact**
The EBRD has cut its forecast for 26 other nations, including Slovakia and Hungary, which are expected to be among the worst hit by tariffs. This highlights the global economic impact of trade tensions and suggests that many countries will feel the effects of a slowing economy.
**Commentary**
“This revised forecast is not surprising given the challenges facing Ukraine’s economy,” said Martin Fornusek, news editor at the Kyiv Independent. “The country has been hit hard by tariffs and ongoing conflict, but Ukrainian businesses have shown remarkable resilience in the face of adversity.”
“It will be interesting to see how Ukraine’s economy responds to these new forecasts,” added Fornusek. “Will the government take steps to boost economic growth, or will they rely on external financing to support the budget?”
Only time will tell, but one thing is certain – Ukraine’s economy will continue to face challenges in the months and years ahead.
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