Macroeconomic Outlook for 2026–27: Resilience Amid the War, Post War Prospects, and the Impact of Developments in the Middle East

Olena Bilan, Head of Research and Chief Economist at Dragon Capital: “Our baseline macroeconomic scenario assumes that active hostilities will continue throughout 2026–2027, including attacks on critical infrastructure, thereby suppressing economic growth. However, substantial external support will sustain the economy and strengthen Ukraine’s military capacity, particularly through the expansion of domestic defense industry production. A prolonged war in the Middle East will have a negative impact on Ukraine’s economy by increasing inflationary pressures and imports, although the overall effect will be limited. Under an alternative scenario of a durable ceasefire, economic growth is expected to remain relatively moderate due to supply-side constraints, primarily labor shortages.”