Published: 01/07/2025

Ukraine’s accession to the European Union could bring economic benefits not only to Ukraine itself but also to the countries of Central Europe (CE). In the most optimistic scenario, accession could lead to a 26% increase in Ukraine’s GDP. Central European countries would also benefit from the EU’s enlargement. Poland – currently Ukraine’s second-largest trading partner after China – could see its GDP increase by approximately 0.17%. The next biggest beneficiaries in the region would be Lithuania and Hungary. EU accession could lead to increased exports from EU countries to Ukraine across all goods and services, particularly in those sectors where trade is currently limited by the DCFTA agreement between the EU and Ukraine. Imports would increase mainly in Ukraine, with minimal expected growth in imports in the rest of the EU. Sectors of Ukraine’s economy that would benefit the most include textiles and apparel, construction, wholesale and retail trade, and sectors currently subject to quotas. These are the findings of the Polish Economic Institute’s report titled “Win-win for Ukraine and Central Europe: The Economic Implications of Ukraine's Accession to the EU”

Three Scenarios for Ukraine’s Development Following EU Accession

Estimating the full scale of economic benefits Ukraine may gain from EU membership is challenging, due to uncertainties related to the ongoing war and the global environment. The Polish Economic Institute analyzed three different scenarios:

Scenario 1 – “Economic Stagnation”: Limited reforms lead to low inflows of EU funds and a lack of foreign investment. The productivity gap with the rest of the world remains unchanged. The population declines to 25 million.

Scenario 2 – “Moderate Growth”: Ukraine closes its productivity gap with the U.S. at the pace seen from 1994–2019, with productivity growing 1.6% over two years. The population remains stable, and moderate growth continues without strong external stimuli.

Scenario 3 – “Rapid Convergence”: Ukraine rapidly modernizes its industry, integrates into Central European supply chains, and sees productivity increase by 7.8% over two years—comparable to the fastest-growing regional economies between 1994 and 2019. The population remains stable, and annual EU fund inflows total EUR 11–12 billion.

EU Enlargement Would Benefit Ukraine and Central Europe

In all three scenarios, Ukraine’s GDP would increase as a result of EU accession. In the “Rapid Convergence” scenario, joining the customs union, integration into supply chains, economic reforms, and EU fund inflows would raise GDP by more than 26%. In the other scenarios, GDP growth would range from 1.7% to 6.8%, depending on productivity and population trends.

Central European countries would also benefit. In the “Rapid Convergence” scenario, countries like Poland, Lithuania, and Hungary could see GDP growth between 0.13% and 0.17%.

“EU enlargement to include Ukraine will bring it clear economic benefits, and an improving Ukrainian economy will positively affect Central European countries. Trade growth means that, aside from Ukraine, the biggest winners will be Poland, Hungary, and Lithuania. Moreover, the faster Ukraine converges with the EU and the more effective its reforms, the greater the benefits for the region,” says Jan Strzelecki, Deputy Head of the World Economy Team at PIE.

EU Accession Would Boost Key Ukrainian Sectors

EU membership would provide strong growth stimuli for many sectors. The biggest gains are expected in construction, textiles and clothing, wholesale and retail trade, and sectors covered by DCFTA quotas (e.g. agriculture). Growth would be driven by trade liberalization, EU funds, and rising domestic demand tied to post-war reconstruction.

Under the “Rapid Convergence” scenario, the largest production increases would be:

• Construction: +40%
• Textiles and clothing: +30%
• Sugar industry: +24%
• Oil and fats industry: +19%
• Meat processing: +16%

Additional 10–15% growth is expected in heavy industry, trade, vehicle repair, air transport, and food processing. These increases in Ukrainian production would only slightly reduce production in other EU countries, including Poland. Household demand for services and manufactured goods could rise by more than 25%, particularly in construction, transport, automotive sales, heavy industry, and mining.

“Accession alone, without growth-stimulating reforms, likely wouldn’t result in increased sales across all sectors. Under the ‘Economic Stagnation’ scenario, small gains would occur in land transport (0.2%), retail/wholesale and vehicle repair (2.9%), and construction (5.7%). Only under ‘Moderate Growth’ and ‘Rapid Convergence’ would demand-driven sales growth be observed across nearly all sectors,” notes Aleksandra Sojka, Senior Analyst at PIE.

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The Polish Economic Institute is a public economic think tank with a history dating back to 1928. Its main research areas include macroeconomics, energy and climate, the global economy, economic foresight, digital economy, sustainable development, and behavioral economics. The Institute prepares reports, analyses, and policy recommendations on key areas of the Polish economy and society, taking into account the international context.

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