Economic growth in Ukraine in May 2025 accelerates to 1.1%
The real gross domestic product (GDP) of Ukraine in May 2025 grew by 1.1% compared to the same month in 2024, according to the Monthly Economic Monitoring of the Institute for Economic Research and Policy Consulting (IER).
"The State Statistics Service has begun to publish data on industry faster, which allows us to more accurately assess the state of the Ukrainian economy. New data show that growth rates remain low, although certain positive signals are already emerging," the results of the study published on the IER website on Thursday say.
According to the IER, real gross value added (GVA) growth in the manufacturing industry accelerated to 2.4% in May compared to 2024 from 1.4% in April after a decline in March. This indicator was supported by more stable domestic demand.
In addition, companies faced fewer problems with access to electricity in May. Thus, according to the IER, real GVA in electricity grew by 3% year-on-year in April and 4.8% in May. The decline in the extractive industry slowed to 10.4% (compared to 2024) in May due to some recovery in gas production and an increase in the extraction of construction materials.
According to the State Statistics Service, retail turnover grew by 4.8% in the first quarter. While wholesale trade data are not yet available, the IER suggests that it continued to contract somewhat due to a further shift to direct sales and less use of warehouses due to their shelling by the Russian army. Therefore, the growth of real GVA in trade in April and May is estimated at 2% year-on-year, although wages continue to grow rapidly.
Real GVA in agriculture in May fell by 2.4% year-on-year, close to April's figures. This reflects a decline in livestock production by households, which was not offset by a small increase in enterprise production.
The IER estimates that real GVA in transport fell by 6.4% year-on-year in May. The slowdown in rail freight transportation continued, and the impact of the suspension of gas transit also persisted, although growth was observed in other transport subsectors.
In the first 5 months of 2025, Ukrzaliznytsia transported 22.2 million tonnes of cargo to ports. In particular, 12.7 million tonnes of grain cargo were transported, of which 11.4 million tonnes were in export traffic (to ports and the western border). This figure is 30% lower than the volumes in January-May 2024.
"The reduction in railway transportation reflects a seasonal trend in reducing grain sales in anticipation of the new harvest," the IER explains.
In addition, in May, electricity imports increased by 3.6% compared to April - to 198,000 MWh. Most electricity was supplied from Hungary (40%). Electricity exports in May decreased by 41% compared to April - to 93,000 MWh.
As for gas, the IER warns of a potential gas shortage if not all production capacity is restored after the Russian shelling. The resource shortage is currently estimated at approximately EUR1 billion. As of mid-May, 6.14 billion cubic meters of gas had been accumulated in underground storage facilities.
