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 by 5% next year if a ceasefire is reached. However, the prospects for rebuilding the country still depend on a lasting peace .

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

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

Ukraine's economic outlook will remain very bleak without a lasting peace agreement. (Photo: EBRD)

Beata Javorcik, chief economist of the EBRD, said they were prepared to support Ukraine's reconstruction should negotiations secure an end to the war. "We are ready to invest when the time comes," Javorcik said.

While Washington welcomed the tentative agreement with Kyiv on exploiting Ukraine's valuable mineral resources, Javorcik praised President Zelenskyy's administration's approach to guiding the economy through its difficult circumstances.

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

But when asked about the long-term outlook for the Ukrainian economy, Ms. Javorcik pointed to the EBRD's analysis of two centuries of data, showing that among countries that experienced war, half still suffered economic damage 25 years later.

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

The EBRD's chief economist added: "The implications of a solution to this conflict for Ukraine will depend on the degree of stability of the situation."

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