The international rating agency Fitch Ratings has worsened its forecast for Ukraine’s economic growth in 2026 from 2.4% to 1.6%, according to the agency’s statement. Fitch also affirmed Ukraine’s long-term foreign-currency issuer default rating at CCC.
Economic growth is expected to accelerate to 2.7% in 2027 amid easing price pressures; however, the outlook remains highly uncertain and depends on the war.
Inflation
The agency also points to rising inflationary pressures: average annual inflation in 2026 may increase to 8.5% due to higher fuel and transport costs, as well as expected increases in fertilizer and food prices.
Analysts believe that the National Bank of Ukraine is likely to maintain a tight monetary policy and gradually limit hryvnia depreciation, using the exchange rate as an anchor for price stability.
GDP / external balance
Fitch estimates that the current account deficit will continue to widen, rising in 2026 from 14.9% of GDP in 2025 due to high energy prices and declining remittances from refugees. It is expected to slightly narrow in 2027 to 18.4% of GDP.
At the same time, this imbalance will be covered by significant international financial assistance, allowing foreign currency reserves to remain at around 5.8 months of imports by the end of 2026.
In December, Fitch forecast Ukraine’s GDP growth at 2.4% for 2026 and 2.8% for 2027, with inflation at 7.4% and 5.7% respectively, and current account deficits of 15% and 15.2% of GDP.
Expectations regarding the war
In its updated forecast, the agency does not expect a rapid easing of hostilities due to deep disagreements between the parties on key issues, particularly territorial concessions and security guarantees. Despite ongoing military pressure and mass attacks on energy and civilian infrastructure, Russian forces, according to Fitch, have achieved only limited territorial gains.
Financing
At the same time, access to significant funding from the EU and managed repayments on external commercial debt (on average about $1 billion in 2026–2028, with the first repayment of restructured Eurobonds in 2029) limits short-term risks.
A significant share of financing needs for 2026–2027 is expected to be covered by a €90 billion EU loan under the Ukraine Support Loan (USL) program (around 46% of GDP in 2026). Repayment is only foreseen in the unlikely event that Ukraine receives reparations from Russia under guarantees from EU member states.
Fitch also notes that available financial reserves and a spending structure concentrated in the second half of the year allow for some buffering of potential delays in funding — liquidity could be maintained until around June 2026 even without USL financing.
Support from international donors remains a key rating factor, including the April agreement to extend official debt repayment deferrals until February 2030.
However, the agency warns of a risk of “donor fatigue” in the medium term due to substantial financing needs and dependence on EU decisions, which could be complicated by political disagreements among member states.
