Given the threats outlined above, other powerful changes will be necessary to give Ukraine’s recovery the best chance of success: namely, EU integration and related domestic reforms; and increased provision of private capital, both from domestic and external sources. Merely ‘bouncing back’ to the pre-war status quo will not be sufficient. Instead, Ukraine needs to jump to a higher level – and in a short space of time.
In macroeconomic terms, Ukraine need to double its pre-war GDP to around $400 billion in order to sustain credible military deterrence and to cope with the growing demands for social security for its war-affected population. This may seem like an insurmountable task, and it will not happen in the short term. But neighbouring Poland provides an example of what is necessary and possible: its GDP stands at around $800 billion today, having been as low as $219 billion prior to EU accession in 2004.
EU integration and institutional reforms
Ukraine’s hoped-for accession to the EU would necessarily push forward structural reform and the modernization of state institutions. Entry into the EU common market, integration into Europe-wide supply chains and the potential for onshoring manufacturing can all catalyse the economic growth necessary for a successful recovery from war. Ukraine has many attractive sectors for external investment. Green energy, defence, agriculture, rare earth minerals and IT could all contribute to the EU’s goals of strategic autonomy and innovation. Unlocking this investment requires not just security, but equally robust and fast reforms to strengthen the rule of law and property rights.
The current government has set a target of joining the EU by 2030. What typically takes a decade, Ukraine wants to achieve in five years. Already today, Ukraine is more prepared in terms of control over corruption than the most recent cohort of new EU members was in 2007. In May 2025, the government approved the necessary roadmaps for the first ‘cluster’ of negotiations on fundamentals to prepare for formal accession talks with Brussels. These documents include the list of reforms intended to strengthen the rule of law, public administration and democratic governance. The EU has learned from the 2007 enlargement, when Bulgaria and Romania joined without fully completing their rule-of-law reforms. For Ukraine, the governance and rule-of-law ‘cluster’ will open first and close last to ensure that the country is in full compliance with EU requirements at the moment of accession.
Conditions tied to foreign funding are often a powerful driver of reform. Current financial assistance from the IMF and the EU’s Ukraine Facility requires progress on anti-corruption efforts, integrity of governance and deregulation. Our survey suggests that this focus is justified: respondents consistently rank the risk of reconstruction funds being embezzled as the number one non-military threat to recovery. However, one positive may be that perceptions of corruption in the reconstruction sector have declined in recent years: 66 per cent of survey respondents cited embezzlement of funds as a major risk in 2025 (see Annex, Q8), compared to 87 per cent in 2022.
Perceptions of corruption in the reconstruction sector have declined in recent years: 66 per cent of survey respondents cited embezzlement of funds as a major risk in 2025, compared to 87 per cent in 2022.
Even in wartime, significant achievements have been made in strengthening the rule of law. Mainly, these measures have consisted of revising appointment processes for judges, enhancing open and competitive court procedures, and strengthening the independence of the national anti-corruption prosecution body. The Specialized Anti-Corruption Prosecutor’s Office was given the opportunity to increase its manpower. It is important that these efforts are implemented, and that they not just remain at the level of legislative changes. Progress has also been made with reforming the Economic Security Bureau of Ukraine (to counter economic offences) and the Accounting Chamber (the country’s key financial control body).
But these gains will take time to consolidate. Ukraine still ranks 105th in Transparency International’s most recent Corruption Perceptions Index. (To compare, Bulgaria and Romania are 76th and 65th, respectively.)
Domestic and external private capital
Ukraine has demonstrated that it has an economy that can survive a disastrous war, preserving macroeconomic stability. In 2023, real GDP grew by 5.3 per cent. Thanks to new emerging insurance instruments, Kyiv succeeded in attracting $2.2 billion of genuine foreign direct investment (FDI). But survival is not enough for recovery. Unlocking the enabling conditions for foreign and domestic investors would be a game-changer. Ukraine needs powerful new technology, higher productivity and a new economic structure. Moving up the value chain (for example, relying less on commodities and raw materials) into the production of more technological products is key.
Even before the war, Ukraine’s investment climate was plagued by negative perceptions due to corruption, weak protection of property rights, predatory law enforcement, and the capture of the economy by vested interest groups that undermined competition. At the peak of post-Revolution of Dignity reforms in 2021, Ukraine recorded a score of 56.2 in the Index of Economic Freedom, compared to 69.7 for Poland. In the best pre-war years, Ukraine was attracting around $3 billion of ‘genuine’ FDI per year.
This could change, but only if deep market reforms take root. The International Finance Corporation has estimated that the private sector could finance one-third of total recovery needs, provided reforms are implemented. It is estimated that a positive reform scenario could see the generation of an additional $60 billion in capital inflows. Reform multiplier effects are most substantial in energy, extractive industries, electricity generation and transport.
