Ukraine down, Russia up in IMF growth forecast
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WASHINGTON — The International Monetary Fund slashed Ukraine's growth forecasts but raised Russia's on April 14, as Kyiv exits a winter of heavy bombing and Moscow rides an unexpected windfall from the war in Iran.
Russia is set to grow 1.1% in 2026, the IMF said in its flagship report on the global economy released on April 14, up from a 0.8% estimate in January.
Ukraine will have to make do with 2% for 2026, says the fund, down from a 4.5% forecast in October — and on the lower end of the fund's February range of 1.8–2.5%.
Ukraine is emerging from the toughest winter of the full-scale invasion yet, after Russia launched thousands of drones and missiles at Ukraine's power and heating infrastructure as temperatures regularly plummeted to minus 20 degrees Celsius.
Moscow wiped out 9 gigawatts of Ukraine's generation capacity — at times leaving Ukraine with just half of what it needed, causing blackouts and interruptions to heating supplies for millions of people.
Russia, which was staring down the barrel of a budgetary crisis in January, has had a sharp reversal in fortunes since U.S.-Israeli strikes on Iran began on Feb. 28. The blockage in the Strait of Hormuz has made Russian barrels more attractive — and expensive.
The fund said that Moscow would carry the momentum of higher energy prices through to 2027, where it is also forecast to grow 1.1% — up 0.1% from the fund's forecast earlier this year.
Ukraine has stepped up long-range drone attacks on Russia's oil infrastructure in recent months, in a bid to dampen Russia's chances to line its war chest.
Roughly 40% of Russia’s oil export capacity was reportedly halted amid Ukrainian drone strikes, pipeline damage, and tanker seizures.
Speaking at a press conference in Washington D.C., Pierre-Olivier Gourinchas, chief economist at the IMF, said that the shock today is comparable in size to the oil price shock in 1974, and that under a best-case scenario — a short conflict — energy prices would rise by 19%.
The impact is already feeding through to Ukraine. Ukraine's top central banker, Andriy Pyshnyy, said that higher oil prices caused by the war in Iran could raise inflation rates by 1.5 to 2.8 percentage points in an interview with Reuters on April 13.
While inflation had been on a downward track from a peak of 15.9% in May last year, prices have risen for two consecutive months — hitting 7.9% in March 2026, according to the National Bank of Ukraine's latest numbers.
Fuel inflation in Ukraine accelerated sharply to 23.4% year-on-year, the bank also said on April 10.
Kyiv is facing one less risk this week, after incoming Hungarian Prime Minister Peter Magyar said that he would not continue to block a 90 billion euros ($106 billion) loan from the EU to Ukraine.
The cash will cover two-thirds of Ukraine's military and civilian needs in 2026–2027.
Ukraine heavily relies on funding from foreign partners to keep the state afloat and fund its military, now in its fifth year of fighting Russia's full-scale invasion.
In the fund's last big projections in October 2025, it already labeled future prospects as dim due to uncertainty and rising protectionism.
This year's meetings were again overshadowed, this time by the war in Iran, leading the IMF to cut its global growth forecast to 3.1%, down from 3.3% in January 2026, but also said that growth could fall to 2.5% under an "adverse" scenario or 1.3% under a "severe" scenario.
"With every day that passes and every day that we have more destruction in energy, we are drifting closer towards the adverse scenario," Gourinchas said.
