The EBRD revised Ukraine’s GDP forecast against the backdrop of Russian attacks on energy facilities
The European Bank for Reconstruction and Development (EBRD) has revised its forecast for the growth of Ukraine’s economy due to increased Russian attacks on the country’s energy infrastructure. By data Bloomberg, in its semi-annual report published on Thursday, the Bank forecasts a 3% growth in Ukraine’s GDP this year.
At the same time, the forecast for 2024 was reduced from the previous 6% to 4.7%. This decision is explained by Russia’s systematic attacks on Ukraine’s energy facilities, which significantly complicates the recovery of the economy.
“More than half of the power generation capacity has been destroyed. Now some of the shortfall is filled by electricity imports from Europe, but this electricity is more expensive. This puts energy-intensive industries at a disadvantage.”, – EBRD Chief Economist Beata Yavorchyk said in an interview with the agency.
She emphasized that the Bank’s main task at the moment is to help Ukraine prepare for the winter period. The EBRD will provide support for the repair work of state-owned companies, as well as finance the purchase of equipment for distributed generation.
Russian attacks on energy and civilian infrastructure before the start of the heating season made the situation much more complicated. In August, Russia carried out its largest ever combined airstrike with more than 230 drones and missiles that hit electrical substations, causing widespread power outages in several regions of Ukraine.
The EBRD remains the largest investor in Ukraine since the beginning of the war. It has invested more than €4.5 billion in the country’s development since 2022 and has been approved for a capital increase of another €4 billion, which will keep lending at a high level during the war and after it ends, when full-scale reconstruction begins.
