Higher oil prices caused by the war in the Middle East could increase Ukraine's inflation rate by 1.5-2.8 percentage points, National Bank of Ukraine Governor Andriy Pyshnyy told Reuters on Monday, UNN reports.
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Pyshnyy said the central bank would stick to its goal of lowering inflation to 5% within three years, using all available tools to ensure that goal is met.
"We are trying to walk a tightrope," Pyshnyy said through an interpreter, noting that prices had already begun to rise.
Asked if the war would force the bank to change its economic forecasts, Pyshnyy said the bank had scheduled meetings for next week to assess the full impact on Ukraine's economy. The secondary effects of the war, particularly on fertilizer prices, would also be "quite significant."
Pyshnyy is part of a large Ukrainian delegation attending the IMF and World Bank spring meetings, hoping to ensure that Russia's war against Ukraine, now in its fifth year, remains on the agenda despite the outbreak of a new war in the Middle East.
He welcomed the election results in Hungary, which saw Prime Minister Viktor Orban removed from office, and expressed hope that this would resolve the issue of delays in the European Union's 90 billion euro loan to Ukraine.
Pyshnyy said he would meet with U.S. Treasury Secretary Scott Bessent and other senior U.S. officials on Wednesday, with U.S. lawmakers on Thursday, and with Federal Reserve Chairman Jerome Powell on Friday.
Meanwhile, he said, massive Russian strikes on Ukraine's energy infrastructure are expected to lead to slower growth and increased migrant outflows.
While the government expects the migrant flow to return to a positive trend after the cessation of hostilities, Pyshnyy said a prolonged conflict could make it difficult for some of the approximately 6 million Ukrainians remaining abroad to return.
"The longer it lasts, the higher the risk of assimilation of Ukrainians abroad," he said.
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