The IMF forecast estimates the duration of Russia's war against Ukraine.

Experts from the International Monetary Fund (IMF) have updated their forecast regarding the duration of the war between Russia and Ukraine. Previously, the baseline scenario suggested that the conflict would last nearly all of 2025, but the expected timeline for the end of active hostilities remains unchanged. Inflationary pressures are expected to remain high, while key economic indicators will see only slight changes in the medium term.

This is mentioned in the latest IMF Memorandum. Unfortunately, there are not many changes in it.

“The baseline scenario suggests that the war will conclude by the end of 2025, and the anticipated developments in the energy sector and key political goals remain relevant,” the document states.

According to the updated forecast, the baseline scenario anticipates:

• A real GDP growth of 4% for Ukraine in 2024, which is 1 percentage point higher than the IMF's October forecast.
• The economic impact of the winter energy shortage will be less significant than previously expected. This is due to business investments in their own generating capacities, an increase in imports from Europe, and efforts to restore and install new energy capacities.
• The inflation forecast for the end of 2024 has been raised by 1 percentage point to 10% due to accelerated price increases for food, particularly raw goods, as well as rising wages and energy costs.

The forecast for 2025 has remained almost unchanged. Real GDP growth is expected to be within the range of 2.5-3.5%. The higher potential due to faster repairs of energy facilities in 2024 and the commissioning of new capacities in 2025 will be offset by a tighter labor market, which will support income and consumption growth amid declining inflationary pressures in the second half of the year.

The forecast for average inflation has been revised upward by 1.3 percentage points to 10.3%. It is expected that temporary inflationary pressures will ease, and by the end of the year, inflation will decrease to 7%.

In the medium term, forecasts for key economic indicators remain unchanged. Real GDP growth is expected to gradually increase after the war, approaching a potential level of 4%. Inflation is projected to decline to the National Bank of Ukraine's target level of 5% by 2027 as volatility caused by the war decreases.

Recall that in October 2024, the IMF revised its forecast on the duration of the war, pushing the end date to 2025. Previously, in June 2024, the baseline scenario anticipated the war would end by the end of 2024.

When and How Will the War in Ukraine End

In July 2023, military expert Oleg Zhdanov predicted the date for the end of the war in Ukraine. According to him, despite optimistic statements from some politicians and analysts, there will be no victory by the end of 2023. And there will not be one in the winter of 2024 either.

By April 2024, Head of Military Intelligence Kyrylo Budanov stated that he is cautious about predictions regarding when the war in Ukraine will conclude. However, he believes it will continue until there is a change in the regime in Russia. Overall, Budanov expressed that he would not oppose if Russia were to break apart into smaller parts.

Economist Oleksiy Kusch analyzed the budget parameters and reached disheartening conclusions about the development of the Ukrainian economy next year. He believes that in 2025, the economy will be in a sort of limbo or purgatory between the hell of war and the paradise of recovery. The war may transition from a full-scale conflict to a low-intensity military conflict with partial demobilization of troops. However, a significant portion of the Armed Forces of Ukraine will remain at the line of demarcation, meaning that key budget expenditures will continue to prioritize the defense sector.

The President of Ukraine stated that there is a need to prepare for a second World Summit to bring an end to the war, thus Zelensky urged all states that truly respect the UN Charter to join this process. He added that 2024 will be a turning point. The format of how the war concludes in the future will depend on this year. Zelensky also stated that under the administration of newly elected U.S. President Donald Trump, the war with Russia would end more quickly.

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