The IMF Predicts End of Ukraine-Russia War in late 2025 or 2026
According to the IMF's latest predictions, the war in Ukraine is expected to end sometime in late 2025, with a more pessimistic scenario suggesting it could continue into mid-2026.
The updated IMF baseline scenario for Ukraine envisages the end of the war in late 2025, while the negative scenario envisages its completion in mid-2026.
IMF predicts Russo-Ukrainian war will end in late 2025 or in 2026
About itit isin the sixth revision under the IMF Extended Financing Mechanism. Basic scenariodevelopments in Ukraine continue to suggest that Russia's war against Ukraine will end in late 2025.
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In its sixth report, the IMF notes that real GDP growth in 2024 reached 4% in the annual dimension, which is 1 percentage point. more than in the fifth review. At the same time, the economic consequences of electricity shortages in winter may be weaker than previously expected. This is due to business investment in its own generating capacity, capacity building for imports from Europe and efforts to repair and install additional generating capacity and distribution networks.
Inflation at the end of the year was revised towards an increase of 1 percentage point to 10%, primarily due to further pressure from accelerating the rise in raw food prices, which also affected basic foodstuffs, as well as through depreciation of previous periods, rising wages and energy prices.
The forecast for real GDP growth remains unchanged at 2.5-3.5% in 2025. This is due to the higher potential from accelerating the repair of energy capacity in 2024 and the introduction of new capacity in 2025, which, however, will be leveled by the effects of a tougher labor market, which will promote higher income growth and consumption amid easing price pressures. Average inflation was revised towards an increase relative to the IMF's past report by 1.3 percentage points. up to 10.3%.
Analysis of economic indicators in the IMF baseline scenario
Negative scenario the IMF predicts a longer war, which will end in mid-2026.
The scenario provides a longer and more intense shock to economic activity, budgetary needs and balance of payments compared to the baseline scenario, with corresponding implications for macroeconomic policy.
General deficitexternal financingunder the deteriorating scenario, it is $ 177.2 billion compared to $ 148 billion under the baseline scenario.
The negative scenario also envisages a reduction in real GDP with a further slow recovery; higher and more stable inflation; deterioration of the current account balance excluding grants; international reserves will remain below 100% under the ARA criterion until 2027; the total deficit without grants, which will remain above 20% until 2026.
Analysis of economic indicators of the negative scenario of the IMF.
Let's remind: Board of Directors of the International Monetary Fundcompletedthe sixth revision of the expanded funding program for Ukraine and approved the allocation of a new tranche of $ 1.1 billion.
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