The NBU has downgraded its forecast for the Ukrainian economy: what will happen to inflation and GDP?

The National Bank of Ukraine announced this during a press briefing on monetary policy decisions.

The National Bank of Ukraine has left the key policy rate at 15%.

The regulator has postponed a cut due to mounting inflationary pressure.

The NBU has also updated its forecast for the Ukrainian economy for 2026–2028.

In March, inflation accelerated to 7.9% year-on-year. The forecast at that time stood at 7.1%.

According to the NBU, inflation continued to rise in April.

Among the reasons cited by the regulator are problems in the energy sector following Russian shelling.

Prices were also affected by a sharp rise in fuel prices due to the war in Iran.

The NBU expects inflation to start falling in 2027.

The updated inflation forecast stands at 9.4% for 2026.

In 2027, the National Bank forecasts inflation at 6.5%.

In 2028, it is expected to fall to 5%.

Economic activity in Ukraine slowed down at the start of 2026.

This was due to problems with energy and logistics.

These arose due to Russian strikes on infrastructure and a very cold winter.

Added to this were the negative economic effects of the war in the Middle East.

As a result, the NBU has downgraded its forecast for Ukraine’s GDP growth in 2026 to 1.3%.

Going forward, the National Bank expects real GDP growth to accelerate.

In 2027–2028, it could range from 2.8% to 3.7%.

The NBU also expects that external financial assistance will enable Ukraine to finance its budget deficit.

Furthermore, it should keep international reserves at a high level.

According to the regulator’s forecast, reserves could amount to US$60–67 billion in 2026–2028.

This should enable the NBU to maintain the stability of the hryvnia.

The regulator cites the EU’s release of €90 billion in funding for Ukraine under the Ukraine Support Loan as an additional positive factor.

The NBU also expects further funding under the EU’s Ukraine Facility and the G7’s Extraordinary Revenue Acceleration programmes in 2026–2027.

Separately, the regulator is counting on funding under the IMF’s Extended Fund Facility (EFF) programme in 2026–2029.

The NBU cites the war as the main risk to the economy.

The regulator notes that risks of further damage to key energy and logistics infrastructure remain.

Developments in the Middle East will also have a significant impact.

At the same time, the NBU points to the possibility of positive scenarios.

In particular, this could be linked to greater involvement of the European community in Ukrainian issues, increased military and financial support from partners, as well as progress in securing a just and lasting peace for Ukraine.

As reported by ThePublic, the global economy has lost $50 billion due to an oil shortage caused by the war in Iran

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