National Bank worsens inflation forecast
Kyiv • UNN
The National Bank of Ukraine worsened its inflation forecast for the end of 2026 to 10% from 9.4%. Inflation will begin to decline in 2027 to 6.9% and reach 5% at the end of 2028.
The National Bank of Ukraine has worsened its inflation forecast for the end of 2026 to 10% from 9.4% and to 6.9% in 2027 compared to 6.5%, forecasted in April, writes UNN.
According to NBU estimates, in July consumer inflation growth resumed, while core inflation continued. The forecast anticipates their further acceleration: to 10% and 9.2% respectively by the end of 2026
Such dynamics, the regulator noted, "will be driven by the expansion of fiscal stimuli, further growth of enterprises' labor costs, as well as secondary effects from the rise in fuel prices and the weakening of the hryvnia in previous periods."
"According to the NBU forecast, inflation will begin to decline in 2027 (to 6.9%) and reach the target level of 5% at the end of 2028. This will be facilitated by a gradual reduction in budget deficits, easing pressure on the labor market, expected increases in harvests, as well as improvement in the energy sector as security risks decrease. The NBU's monetary policy measures will also have a significant impact," the statement said.
At the same time, the National Bank noted that in June consumer inflation slowed as expected to 7.2% "primarily due to an expansion in the supply of raw food products." In contrast, core inflation continued to accelerate (to 8.1% y/y) and exceeded the NBU's forecast trajectory. "In recent months, the intensification of fundamental price pressure has shown signs of a sustained trend due to rising business costs, primarily for logistics, labor, and energy resources. Inflation expectations were generally stable but remained elevated," the statement added.
Regarding GDP, the regulator stated that "in the second quarter, economic growth resumed thanks to improvements in the energy system and an increase in budget expenditures amid reduced uncertainty about external aid." "According to NBU estimates, real GDP in the second quarter grew by 0.8% y/y," the statement reads.
More significant economic growth, as noted by the National Bank, "is hindered by the consequences of intensified Russian attacks on logistics infrastructure, including the blocking of ports, as well as on energy and business facilities." "At the same time, the easing of fiscal policy and a large-scale economic impulse from directing part of external financing to localize weapons production, as well as larger harvests than last year, will contribute to a revival of economic activity in the second half of the year," the NBU added.
As a result, the NBU improved its real GDP growth forecast for 2026 to 1.8%
In 2027-2028, according to the NBU forecast, "economic growth will accelerate to about 3% thanks to increased investments in building production capacities, particularly in the defense industry, gradual stabilization of the energy sector, as well as further increases in harvests and sustained consumer demand."