The International Monetary Fund (IMF) has issued two forecasts for when the Russia-Ukraine conflict will be resolved, saying that the hostilities are likely to end by the end of 2025 under the baseline scenario, or around mid-2026 under the negative scenario.
In its sixth assessment under the Expanded Fund (EFF) mechanism for Ukraine, published on the IMF's website last week, the organization said the Ukrainian economy was "stable" and Kiev continued to achieve the fund's target targets.
In response, the IMF approved $1.1 billion to support Kiev's budget, bringing the total financial assistance to Ukraine under the program to $9.8 billion. The total value of the EFF program, which runs until 2027, is $15.5 billion.
According to the IMF, Ukraine's economy shows "more resilience than expected in the face of energy shocks". However, the IMF said it is expected to slow down next year due to "an increasingly tight labor market, the impact of Russian attacks on Ukraine's energy infrastructure and continued uncertainty about war."
According to the IMF's baseline scenario, Ukraine's GDP is expected to grow by 4% in 2024 with inflation of 10%. In 2025, the IMF expects GDP growth to be between 2.5% and 3.5%.
However, in the negative scenario, which is expected to have a prolonged conflict, Ukraine could experience deeper economic shocks, including a slower GDP recovery, higher inflation and a significant financial deficit of over 20% until 2026.
In this scenario, Ukraine's borrowing/support needs are also expected to reach more than 177 billion USD, compared to 148 billion USD according to the baseline forecast.
The IMF report comes as Ukraine faces a record budget deficit of $43.9 billion in 2024 and relies heavily on international donors to cover a significant portion of its financial needs.
Since the escalation of the Ukrainian conflict in 2022, Kiev has received about $238.5 billion from the West, accounting for nearly 90% of countries' budget spending during this period.
The largest donor to Ukraine in the past three years has been the US, which has provided Ukraine with about $95.2 billion, two-thirds of which was military aid.
Meanwhile, a senior member of Ukrainian President Volodymyr Zelensky's government told the Washington Post that Kiev officials "are beginning to believe" that the conflict with Russia will be resolved next year. This change in attitude is a direct result of US President-elect Donald Trump's public talk about a solution to the conflict.
Trump has promised in his election campaign that the conflict will end within a day of taking office, although he later admitted that it could take more time.
The US president-elect has revealed little detail about how he plans to achieve that, but leaks in the media and comments from his closest advisers suggest he will promote a freeze on fighting along the current path of contact, using the leverage of US military aid to Ukraine to force President Zelensky to negotiate with Russian President Vladimir Putin.
