The International Monetary Fund (IMF) has revised its forecast for global GDP growth in 2025 downward to 3%, compared with actual growth of 3.3% in 2024. This outcome reflects a combination of factors, with U.S. trade policy and broad geopolitical instability playing the central roles.
The United States is stepping up efforts to protect its domestic market, while in the Euro Area, weak demand and business caution continue to restrain growth. Additional pressure stems from conflicts in the Middle East, the war in Ukraine, and the unpredictable policies of the Trump administration—all of which are curbing investment and weighing on growth forecasts.
Figure 1. Projected Economic Growth in 2025–2026, %
Source: IMF
These global developments have direct consequences for Ukraine. Weak growth in the EU—Ukraine’s main trading partner—reduces demand for Ukrainian metallurgical and agricultural products. In the first half of the year, the EU accounted for 47% of Ukraine’s agri-food exports, and the decline in demand there is immediately felt in Ukraine: exports of agro-industrial products fell by 15%. Lower foreign-currency inflows are putting pressure on the hryvnia and complicating budget execution. Investors are also becoming more cautious, which means higher borrowing costs and less willingness to invest in new projects.
A separate source of tension is the new wave of trade protectionism. In January, Donald Trump reinstated the America First course and announced new import tariffs. China responded in kind. After several rounds of tariff increases, the two sides ultimately agreed to lower the rates.
The EU also reached an arrangement with the United States: Brussels opened part of the European market, while Washington imposed a 15% tariff on European goods and required the EU to purchase American energy resources through 2028. This latter measure is beneficial for Ukraine, as it reduces Europe’s purchases of Russian energy resources.
Ukraine was assigned a baseline 10% tariff, but its overall impact is limited—only 2% of Ukraine’s exports go to the United States. However, specific effects are tangible: for example, in June, exports of pipe products to the U.S. fell by 84%.
Forecasts from international institutions are unanimous: in 2025, global trade will grow slowly and conditions will remain challenging. The services sector is expected to perform more strongly, partly offsetting the losses in goods trade.
A detailed analysis of global trends and their impact on Ukraine’s macroeconomic indicators and foreign trade can be found in the full version of the report.
Attention
The author doesn`t work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations
