NBU Head Forecasts When Inflation Will Start to Decrease.

The National Bank of Ukraine will allow exchange rate fluctuations to maintain control over inflation and achieve the target inflation rate of 5%. This was stated by the head of the NBU, Andriy Pyshny. The main task of the regulator is to maintain moderate inflation in 2024 and bring it closer to the 5% target in subsequent years. This is planned to be achieved by protecting the population's hryvnia savings from inflation and maintaining stability in the foreign exchange market.

The NBU head also stated that decisions regarding the key rate would take into account the attractiveness of the hryvnia. It was decided to reduce the key rate only in the first quarter of 2025, but the policy can be flexibly adapted to maintain economic stability.

It is forecasted that inflation will moderately increase to 8.7% this year but will decrease to 6.6% next year, and return to the target of 5% in 2026. Adequate monetary policy and the gradual normalization of economic operating conditions will help achieve these indicators.

Economic Adaptability and Stability

Andriy Pyshny emphasized that in the first half of 2024, Ukraine's economy demonstrated significant adaptability. It withstood unprecedented pressure from the war and electricity shortage but continues to recover. Adaptation was facilitated by the decisions of the NBU, the government, and international macro-financial stability support. Inflation also slowed to 3.2% in March and remains moderate.

Andriy Pyshny believes that economic recovery will continue, although with a slowdown to 3.7% in 2024. However, in the next two years, GDP growth is forecasted to accelerate to 4-5% per year.