Recent developments in the Middle East have led to a notable rise in oil prices, which could increase inflation in Ukraine by approximately 1.5 to 2.8 percentage points. This situation has prompted concerns regarding the broader economic implications for the country.
During the spring meetings of the International Monetary Fund (IMF) and the World Bank in Washington, Andriy Pyshnyy, the head of the National Bank of Ukraine (NBU), highlighted that prices have already begun to rise. He noted that the secondary effects of the conflict, particularly on fertilizer prices, would also be significant.
“We are trying to walk a fine line,” Pyshnyy stated through a translator.
He reaffirmed the central bank’s commitment to reducing inflation to 5% within three years, utilizing all available tools. Upcoming meetings will assess the full impact of these developments on Ukraine’s economy.
As part of a larger Ukrainian delegation attending the IMF and World Bank events, Pyshnyy is scheduled to meet with U.S. Treasury Secretary Scott Bessent, various officials, members of Congress, and Federal Reserve Chair Jerome Powell. A primary goal of these discussions is to ensure that the ongoing conflict between Russia and Ukraine remains a priority, despite the emergence of new tensions in the Middle East.
In a related context, Pyshnyy expressed optimism regarding the recent elections in Hungary, which resulted in a setback for Viktor Orbán’s party. He hopes this change will facilitate the release of a delayed €90 billion loan from the European Union to Ukraine, which had been stalled due to disputes over a war-damaged pipeline.
Furthermore, Pyshnyy discussed the impact of intensified Russian strikes on Ukraine’s energy infrastructure, which are expected to hinder economic growth and exacerbate the outflow of migrants. While the government anticipates a positive shift in migration patterns following the cessation of hostilities, the prolonged nature of the conflict complicates the return of approximately six million Ukrainians currently abroad.
“The longer this continues, the greater the risk of assimilation of Ukrainians abroad,” he emphasized.
Currently, inflation in Ukraine has accelerated, with prices rising by 7.9% over the past year and 1.7% in March 2026 alone. The primary drivers of this increase include rising fuel costs linked to the conflict in the Middle East and surging global oil prices. Food items, fuel, and utility services have seen the most significant price hikes.
The ongoing conflict involving the U.S. and Israel against Iran has been active since late February 2026. Iran’s closure of the Strait of Hormuz, through which approximately 20% of the world’s oil passes, has resulted in oil prices exceeding $100 per barrel. The U.S. Energy Secretary has predicted a peak in prices in the coming weeks. In response, the U.S. has initiated a maritime blockade of Iranian ports, although European allies have opted not to participate.
Meanwhile, tensions continue between the NBU and Ukrposhta over the establishment of a postal bank. The regulator has imposed a fine on the company, which is preparing a legal challenge, leading to public criticisms from both sides.
The ongoing conflict in the Middle East is expected to significantly impact Ukraine's economy, with inflation projected to rise due to increased oil prices. Key discussions at the IMF and World Bank meetings aim to address these challenges while ensuring continued support for Ukraine amidst its ongoing conflict with Russia.