Key economic indicators of Ukraine and the world in the first quarter of 2025

This article presents the key macroeconomic indicators of Ukraine and the global economy as of April 1, 2025. The analysis was prepared based on the latest data from the State Statistics Service of Ukraine, the National Bank of Ukraine, the International Monetary Fund, the World Bank and the United Nations. Maxim Urakin, Director of Marketing and Development at Interfax-Ukraine, PhD in Economics and founder of the Experts Club information and analytical center, presented an overview of current macroeconomic trends.

Macroeconomic indicators of Ukraine

The first quarter of 2025 was a period of slow, but still positive economic movement for Ukraine. According to the updated estimates of the National Bank of Ukraine, the country's real GDP grew by 0.5% year-on-year, indicating a gradual stabilization after a volatile start to the year. This growth is not high by international standards, but in the context of a full-scale war, a constant threat to infrastructure, logistics and limited access to capital, this result is seen as a positive signal.

"Half a percentage point of GDP growth in the first quarter is an indicator of the system's continued viability rather than an indicator of development. The domestic market has begun to revive, especially in the areas of consumption, logistics, and certain technology sectors. But so far, it is mostly “on the spot” growth - without investment impetus, without exports, without a long-term resource," explains Maksym Urakin.

Inflation remains one of the main challenges. As of March 2025, the annual inflation rate was about 12.6%, which remained almost unchanged compared to February, but shows a tendency to gradually slow down. The NBU points to the impact of the seasonal decline in food prices, currency stabilization, and prudent monetary policy as key factors in restraining the rate of price growth.

"The main thing is to maintain a balance between fighting inflation and preventing a curtailment of economic activity. The NBU's monetary policy in the first quarter was quite balanced: on the one hand, it maintained the key policy rate, and on the other hand, it provided mild intervention support to the hryvnia. However, we are still far from leaving the inflation risk zone," the expert emphasizes.

The state of foreign trade, on the other hand, indicates a deepening of structural problems. According to preliminary estimates of the Center for Economic Strategy, in April the foreign trade deficit reached $3.6 billion, which was the result of a significant excess of imports ($6.3 billion) over exports ($3.1 billion). According to analysts, the trade deficit exceeded the figure for the same period in 2024, despite activity in the agricultural sector and the supply of services.

"The worst part is that this deficit is not situational, but structural. Imports of energy, equipment, chemicals, and transportation remain dominant, while exports are largely limited to raw materials. This jeopardizes currency stability if international financial support is withdrawn," the founder of Experts Club comments.

Amid the growing trade gap, the level of international reserves remains a positive signal. According to the NBU, as of April 2025, the reserves amounted to about $42 billion, which is a historical high for Ukraine. This growth was made possible by the next tranches of financial assistance from the European Union, the United States, and the IMF, as well as by the NBU's successful foreign exchange operations on the interbank market.

"Reserves of more than $40 billion are not just an indicator, they are an airbag for a country that lives in a constant risk mode. But we should not be tempted by this: this is a resource of trust that must be transformed into economic recovery, otherwise we will lose it again, as it has happened in the past," warns Maksym Urakin.

However, the debt burden remains high. According to the latest estimates, Ukraine's total public and publicly guaranteed debt as of early April 2025 amounted to about $147.2 billion, or about 94% of GDP, of which more than $100 billion was external borrowing. This underscores the country's dependence on external assistance and international financing, including IMF, EU, and World Bank programs.

Global economy

As of early April 2025, global economic indicators show a slowdown in growth, with continued inflationary pressures, especially due to new trade risks and geopolitical instability. According to the IMF, global growth has accelerated to 2.8% in 2025, one of the lowest levels in decades. Inflation in most regions is gradually declining, but it remains above target, especially in developing countries.

Macroeconomic uncertainty has intensified amid trade protectionism, rising energy prices, and geopolitical challenges, making forecasting more difficult. Central banks that have not yet tightened their policies are on hold, and investors are becoming more cautious. Morgan Stanley and S&P Global forecasts indicate a further weakening of global GDP to 2.2-2.9% in 2025, which negatively affects investor confidence.

According to the BEA, in the first quarter of 2025, the US GDP declined by -0.3% year-on-year, the first decline since 2022. This was mainly due to a sharp increase in imports (pre-purchases before possible tariffs) and a reduction in government spending. However, final domestic demand remained relatively resilient (+3%). Inflation in March/April was approximately 2.3-2.6% (PCE), which is in line with the regulator's expectations; the Fed is keeping the rate at 5.25-5.5% in anticipation of stabilization signals.

According to official data, in the first quarter of 2025, China's GDP grew by +5.4 % yoy, meeting the government's target of about 5 %. However, fiscal and monetary restrictions, particularly in the real estate sector, are slowing growth. By May, budget revenues fell by 0.3% yoy, indicating weaker economic activity. In response, stimulus measures are being introduced, but their effect is still uncertain.

The European Commission forecasts annual GDP growth of +1.1 % for the EU and +0.9 % for the euro area, with a marked improvement in the first quarter (+0.6 % q/q), the highest since 2022. In March/April, inflation was below 2%, gradually approaching the target level.

According to the ONS, in the first quarter of 2025, the UK showed GDP growth of +0.7% qoq, making it the leader among the G7. On an annualized basis, the growth was about +1 %. Inflation in April was about 3.4 %, which makes the Bank of England remain cautious in cutting the rate (from 5.25 % to 4.5 %). However, exceeding the inflation target is holding back the economy's acceleration.

In the first quarter, Turkey demonstrated a positive growth rate of about +2.3% qoq, or ≈ +3.0% yoy. Inflationary pressures remain extremely high - ≈38-39 % in March/April, despite the central bank's measures.

The Indian economy continues to show one of the highest growth rates among the major economies: in the first quarter of 2025, the rate is +7.4% yoy, while inflation is under control: CPI - ~3.2 % in April. The forecast for the financial year 2024-25 is +6.3-6.5%.

In the first quarter of the year, Brazil managed to achieve GDP growth of +1.3% qoq (≈+3.5% yoy), which is the best figure for the last two years. However, inflation in April rose to 5.48%, the highest level since February 2023, and is a source of serious concern.

"The world at the beginning of the second quarter shows promise, but also high instability. The United States has fallen into recession, but domestic demand is still holding up. Europe is slowly recovering from the crisis, and the UK is showing resilience. China is stable in terms of growth, but weak in terms of consumption. India is a model of dynamism and innovation. Turkey is on the verge of an inflationary crisis. Brazil is making progress, but runs the risk of rising prices. It's time for Ukraine to make a decision: will we use the flow of imported resources only to offset the deficit, or will we turn it into a chance for a technological and industrial breakthrough?" said Maksym Urakin.

Conclusion.

As of the beginning of the second quarter of 2025, Ukraine's economy is in a phase of maintained equilibrium. Restrained growth, controlled inflation, and record reserves are the basic factors of stability. However, the deep trade deficit, debt burden, and lack of investment drivers remain key risks to the medium term.

The global economic picture remains uneven with clear geographic imbalances. Ukraine has demonstrated resilience, maintaining growth and record reserves while facing challenges in foreign trade. Global markets - from the US to India - are shaping new conditions for strategic solutions to these challenges.

A more detailed analysis of Ukraine's economic performance is available in the monthly information and analytical products of Interfax-Ukraine's Economic Monitoring.

The head of the Economic Monitoring project is Maksym Urakin, PhD in Economics.