Q2 GDP beats Q1, but H2 outlook darkens as air strikes intensify

UKRAINE - In Brief 13 Sep 2026 by Dmytro Boyarchuk
Ukraine's GDP growth accelerated to 0.4% y/y in Q2 2026, according to the State Statistics Service of Ukraine — revised down from the preliminary estimate of +0.6% y/y. This follows a 0.6% y/y contraction in Q1 2026. The improvement was driven mainly by a smaller negative contribution from net exports, which narrowed to -5ppt in Q2 from -8ppt in Q1. Stronger food exports and lower energy imports account for the gain. However, against the backdrop of the unfolding Black Sea blockade, this improvement is likely temporary. Private consumption growth eased to +6.8% y/y in Q2 from +10.7% y/y in Q1. This appears to reflect a base effect — private consumption grew only 2.4% y/y in Q1 2025 — rather than a genuine slowdown, as overall consumption remained strong and no clear driver of a Q2 deceleration is apparent. Government consumption remained subdued at -1.4% y/y in Q2, little changed from -1.6% y/y in Q1. Delayed EU financing — funds under the Ukraine Support Loan arrived only in June — kept the authorities cautious on public spending. The outlook for H2 2026 is mixed. On one hand, a strong grain harvest is expected to support GDP, at least through higher inventories, if export capacity remains constrained. On the other, strikes on businesses — production facilities, retail, energy assets, and infrastructure across the board — are intensifying, and this trend is only set to worsen. Against this backdrop, a genuine improvement in GDP performance looks unlikely. The NBU's forecast of +1.8% y/y for 2026 appears overoptimistic given the intensification of air raids.

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