The National Bank has updated its macro forecast and expects inflation to accelerate

The National Bank of Ukraine (NBU) has updated its macro forecast and expects inflation in the country to accelerate to 8.5% by the end of 2024. Despite the growth, inflation will remain moderate thanks to a number of measures aimed at protecting hryvnia incomes and savings of the population, as well as ensuring the stability of the foreign exchange market.

In the updated macro forecast of the NBU, it is explained that one of the restraining factors of inflation will be a moratorium on raising tariffs for gas, heating and hot water. This will help limit the price pressure on consumers in the field of housing and communal services.

The main reasons for the increase in inflation are an increase in business costs, an increase in excise taxes, the depletion of the positive impact of last year's harvests, and the negative effects of the summer drought on this year's yield. These factors affect the general level of prices in the country and create additional challenges for economic stability.

The NBU predicts that inflation will begin to slow in 2025, reaching 6.6%, and will return to the target of 5% in 2026. The balanced monetary policy of the NBU and the reduction of external inflationary pressure will contribute to this process.

Regarding economic growth, the NBU improved its forecast for 2024 to 3.7%, despite challenges related to the war and damage to the energy infrastructure. Business adaptation to wartime conditions, stable operation of the maritime corridor and expected expansion of budget incentives contribute to economic recovery.

For 2025-2026, the NBU predicts an acceleration of real GDP growth rates to 4-5%. This will become possible thanks to the gradual normalization of economic conditions, the maintenance of soft fiscal policy and the revival of external demand. However, the ongoing war makes it impossible to fully return the economy to normal operating conditions and creates additional difficulties for stabilizing inflation at the target level of the NBU.

Thus, although inflation remains a challenge for Ukraine, the NBU continues to take measures to preserve economic stability and gradual growth.