Ukraine’s Economy After the Winter Blow: Why the NBU Forecast Gives Cautious Hope, But Does Not Promise an Easy Recovery
The National Bank of Ukraine expects the economy to return to growth as early as the second quarter of 2026. After a difficult start to the year, this is an important signal, but it should not be read as a quick solution to all problems. The NBU forecast shows not a sharp breakthrough, but a slow recovery of a country that is simultaneously holding the defense, repairing infrastructure, supporting people and trying to keep businesses operating. The beginning of 2026 was difficult for the Ukrainian economy. Massive Russian attacks on energy infrastructure, railways and seaports coincided with a cold winter. This created an acute electricity deficit, which hit large industrial enterprises. When production cannot operate steadily, this quickly affects overall economic indicators. That is why real GDP declined by 0.5% in the first quarter.
This decline was not the result of weakness in the economy itself. It was the result of wartime pressure on key systems without which business cannot function normally: electricity, logistics and ports. The Ukrainian economy has once again shown that its growth directly depends on the security of infrastructure. If the energy system is damaged, industry reduces activity. If there are problems with railways or ports, exports, supplies and production chains suffer.
In spring, the situation in the energy sector improved, and this became one of the reasons why the NBU expects a return to growth already in the second quarter. Another important reason is the final approval of the European Union’s Ukraine Support Loan program worth 90 billion euros. These funds are expected to help the government finance reconstruction projects, social support and investments in defense capability. For Ukraine, this is not only financial support. It is a resource that gives the state more room for planning. When there is predictable external financing, the government can fulfill social obligations more steadily, support critical spending and invest in projects needed for recovery. External support remains one of the main factors of economic resilience during the war.
According to the NBU forecast, Ukraine’s economy will grow by 1.3% in 2026. This is a modest figure, but after the blow to infrastructure at the beginning of the year, even such growth matters. It means that the economy has not stopped, but has managed to move out of the downturn. In the following years, the regulator expects growth to accelerate to 3-4%, but this scenario will depend on how stable the energy sector remains, whether international support continues and whether there are no new large-scale destructions. The NBU pays separate attention to the labor market. Here the situation looks contradictory. On the one hand, the number of people looking for work is increasing. This was helped by the halt in migration from Ukraine in the first quarter of 2026, the State Border Guard Service recorded that the number of citizens entering Ukraine exceeded the number of those leaving. On the other hand, the staff shortage still remains. This means that the return of people alone does not cover business needs. Enterprises need specific specialists, experienced workers, people ready to work under conditions of instability, relocations, production risks and constant changes. The labor market has become one of the areas where the war is especially visible: more people are being sought, competition for them is stronger, but finding the right workers is still difficult.
Because of the labor shortage, private business is forced to raise wages. In the public sector, payments have also increased due to the rise in the minimum wage and the revision of official salary rates. The NBU forecasts that average real wages in 2026 will grow by almost 12%, and in the following years by 6-7%. This is one of the most noticeable indicators in the forecast. But it should be assessed carefully. The growth of real wages means that incomes are expected to rise faster than inflation. For people, this is a positive signal, because it is not only about larger figures in the payroll, but about a potential improvement in purchasing power. At the same time, such wage growth is partly forced businesses are paying more not only because of expansion, but also because of a lack of workers. That is why wage increases have two sides. For employees, this is an opportunity to earn more. For businesses, it means additional costs that may be passed on into the prices of goods and services. And here the economy faces another problem inflation.
After inflation declined from June 2025 to January 2026, prices began to rise again. In April, consumer inflation stood at 8.6% year-on-year. According to the NBU, by the end of the year it may accelerate to 9.4%, and then gradually decline to 6.5% in 2027 and to the target level of 5% in 2028. The reasons for rising prices are clear. Winter attacks on the energy sector made electricity more expensive and less stable for business. The spring outbreak of war in the Middle East affected the cost of oil and gas. The previous weakening of the hryvnia also had an impact, as did the increase in enterprises’ labor costs. When energy resources, logistics, production and wages become more expensive, businesses are often forced to include these costs in the final price.
For citizens, this means that even income growth is not always felt immediately. If wages rise, but food, services, fuel, utilities or essential goods become more expensive at the same time, the effect on the family budget becomes weaker. That is why inflation remains one of the main risks to well-being. The NBU’s updated forecast shows an economy that does not have easy conditions for recovery, but is still able to move forward. Ukraine is entering a period of cautious growth after a difficult first quarter. This growth will rely on a more stable energy sector, external financing, business activity and a gradual recovery of domestic demand.
At the same time, the risks remain high. New attacks on energy or transport infrastructure could once again hit production. Accelerating inflation could reduce the real effect of wage increases. The staff shortage could restrain business development even when demand exists. And dependence on external support means that the country’s financial stability is largely linked to partners’ decisions. The NBU forecast is important precisely because of its sobriety. It does not paint a picture of a quick economic breakthrough, but it also does not describe stagnation. After the winter blow, the Ukrainian economy has a chance to return to growth, but this growth will come with many limitations. It will require protected energy infrastructure, stable financing, a strong labor market and control over prices. The main point in this forecast is not the figure of 1.3% itself. The main point is that even after strikes on critical infrastructure, the economy is able to regain movement. Slowly, unevenly, with risks, but without stopping. This ability to hold on and return to growth remains one of the key indicators of Ukraine’s resilience.
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