Ukraine’s National Bank has decided to maintain its key policy rate at 13 percent amidst increasing inflation rates. The country saw a spike in prices due to a 64 percent increase in household electricity tariffs imposed by the government in June 2024. However, food prices remained relatively stable. The central bank expects inflation to continue rising, reaching 7.9 percent in the third quarter and 8.5 percent by the end of the year, peaking at 9.7 percent in the first quarter of 2025.
Despite economic challenges such as defense spending, damaged infrastructure, and potential reduction in international support, Ukraine’s economic growth is expected to stabilize. The NBU forecasts a GDP growth rate of 3.7 percent for this year, supported by energy lending programs and fiscal stimulus measures.
The central bank also highlighted uncertainties, including proposed tax increases for defense funding and the possible impact on consumer prices. Nevertheless, the overall outlook remains positive, with a projected GDP growth of 4 to 5 percent in 2025-2026.