Financial sector news

As predicted by the National Bank, the pace of economic recovery accelerated compared to the second quarter of 2025. In the third quarter of 2025, real GDP grew by 2.1% year-on-year (y/y) and by 0.8% seasonally adjusted compared to the previous quarter. The main driver was fiscal stimulus caused by increased budget spending. The improved situation in the energy sector in the third quarter of 2025 compared to the same quarter of 2024 also had a significant impact on economic growth.

The regulator identified the following drivers of GDP growth:

Economic recovery:

Consumption in the public administration sector grew by 12.2% y/y, making the largest positive contribution to real GDP growth at 4.1 percentage points. This fiscal stimulus was made possible by substantial international financing. Final household consumption continued to increase (by 6.7% y/y), and its contribution to GDP growth remained positive (3.9 p.p.).

Investment growth:

Gross fixed capital formation grew by 11.5% y/y and made a significant positive contribution to real GDP growth (2.2 percentage points). In addition to the revival of construction activity, investment in agricultural processing and defense sector projects continued to grow. This was facilitated, in particular, by significant capital expenditures from the budget, the nominal volumes of which in the third quarter were among the highest since the start of the full-scale invasion (only the fourth quarters of 2023 and 2024 saw higher volumes).

Increase in the negative contribution of net exports:

Physical export volumes continued to decline due to low agricultural stocks and weak demand for mining and metallurgical products, as well as new trade conditions with the EU.
At the same time, the growth of imports of goods and services accelerated amid increased purchases of machinery and metallurgical products to enhance defense capabilities and restore infrastructure. As a result, the negative contribution of net exports to GDP growth increased to 8.9 percentage points.
At the same time, economic performance by activity in the third quarter was uneven.
The expansion of budget expenditures supported the public administration and defense sectors, whose gross value added (GVA) increased by 15.1% y/y. Growth also occurred in other budget sectors, particularly in education, health care, and social assistance.
The improved situation in the energy sector in Q3 2025 compared to the same quarter of 2024 contributed to the acceleration of GVA growth in the energy sector (to 6.7% y/y) and supported other sectors of the economy. In particular, the manufacturing sector's GDP increased by 1.7% y/y, while the rate of decline in the extractive industry slowed to 2.1% y/y.

Thanks to steady domestic demand, stable energy supplies, and government support programs, construction activity accelerated significantly, growing by 31.5% y/y. Against the backdrop of increased private consumption, the trade sector's GDP continued to grow (by 2.6% y/y).
The decline in agricultural output slowed to 12.3% due to the postponement of part of the harvest from the second to the third quarter. At the same time, the harvest of late crops is proceeding more slowly than previously expected, which will cause a similar shift from the third to the fourth quarter. The situation in poultry farming remained stable overall, while livestock production continued to decline due to the worsening epizootic situation and the consequences of the war.

The decline in the transport sector also continued, deepening to 9.3% y/y amid a decrease in export traffic volumes.

The NBU's forecasts for economic recovery are cautiously optimistic.

According to the NBU's October forecast, economic recovery will accelerate to 3.4% in the fourth quarter of 2025 thanks to expanded fiscal stimulus and private consumption. Taking into account the results of previous quarters, the NBU expects real GDP growth at the end of 2025 to be close to the October forecast (1.9%).

In the coming years, the National Bank forecasts a moderate acceleration in economic growth (to 2-3%) due to increased harvests and increased investment in reconstruction projects and the defense sector.
The NBU's updated forecast for 2026–2028 will be announced during a press briefing on monetary policy on January 29, 2026, and more detailed information will be provided in the Inflation Report on February 5, 2026, in accordance with the approved schedule.