The National Bank of Ukraine has lowered its inflation forecast for the end of 2026 from 7.5% in the January forecast to 9.5%, and Ukraine's GDP growth from 1.8% to 1.3%, the NBU reported on Thursday, UNN writes.
Details
According to the NBU, inflation accelerated to 7.9% y/y in March, while core inflation rose to 7.1%. According to NBU estimates, it continued to grow in April. Price pressure intensified primarily due to the difficult situation in the energy sector following Russian shelling and a sharp increase in fuel prices against the backdrop of the war in the Middle East. Inflation is expected to return to a path of steady decline as early as next year.
Updated inflation forecast: 9.4% in 2026, 6.5% in 2027, 5% in 2028
At the same time, moderate economic growth is expected this year, which will accelerate in the following years, the NBU indicated.
At the beginning of 2026, economic activity slowed down, primarily due to the consequences of Russian attacks on energy infrastructure and logistics facilities amid a very cold winter.
Taking into account the poorer results of the first quarter, the still difficult state of the energy system, and the accumulation of negative economic effects from the war in the Middle East, the NBU lowered its GDP growth forecast for 2026 to 1.3%. Real GDP growth is expected to accelerate thereafter to 2.8-3.7% in 2027-2028
External assistance, the National Bank reported, will allow for the financing of the budget deficit and the maintenance of international reserves at a high level: $60-67 billion in 2026-2028. This, as stated, will ensure the NBU's ability to maintain the stability of the foreign exchange market.
"Uncertainty regarding external support has significantly decreased. The EU has unlocked financing for Ukraine in the amount of 90 billion euros (Ukraine Support Loan). Further financing is expected under the Ukraine Facility programs from the EU and the Extraordinary Revenue Acceleration from the G7 countries in 2026-2027, as well as within the Extended Fund Facility (EFF) from the IMF in 2026-2029," the NBU noted.
As reported, risks of further destruction of important energy and logistics facilities due to the war persist. The course of events in the Middle East will also have a significant impact.
"At the same time, given the increasing involvement of the European community in Ukrainian issues, the probability of positive scenarios remains, particularly those related to strengthening military and financial support from partners and achieving significant progress in ensuring a just and lasting peace for Ukraine," the National Bank indicated.