Ukraine Q1 2026 GDP Shrinks 0.5% Amid Ongoing War and Energy Crisis
Economic Performance and Contributing Factors
Q1 2026 GDP and Quarterly Comparison
May 5 (Reuters) - Ukraine's economy shrank 0.5% year-on-year in real terms in the first quarter of 2026, the statistics service said on Tuesday.
Gross domestic product was down 0.7% compared with the fourth quarter, it added.
Impact of War and Energy Crisis
The Ukrainian economy contracted as Russia pounded the energy sector and other infrastructure with hundreds of drones and missiles during a very cold winter, forcing long blackouts and disrupting water and heating supplies, economists said.
Central Bank Forecast and Future Outlook
Due to the contraction in the first quarter of the year, challenges in the energy sector, and the negative impact of the war in Iran, Ukraine's central bank has downgraded its forecast for GDP growth for 2026 to 1.3% from about 1.8% previously.
GDP growth is expected to pick up later in the year due to warmer weather and smaller energy deficits, economists and officials said.
Industrial Production Trends
Statistics data showed that industrial production also fell by 1.1% in the first quarter of the year. The statistics service said that it grew by 4.5% year-on-year in March after a 2.6% fall in February and 8.1% decrease in January.
Comparison with Previous Years
Ukraine's GDP grew by 1.8% in 2025 after a 2.9% increase in 2024, but the economy is still about 20% smaller than it was before Russia's invasion in February 2022.
(Reporting by Yuliia Dysa, Olena Harmash, editing by Chizu Nomiyama )
