NBU worsened inflation forecast and expects slower economic recovery

The National Bank of Ukraine has worsened its inflation slowdown forecast to 9.7% in 2025, and economic recovery will be slower than last year – at 2.1% this year, UNN writes.

The NBU revised the projected inflation trajectory towards a slower decline. It is expected to slow down to 9.7% in 2025, 6.6% in 2026, and the target of 5% in 2027.

The dynamics of inflation in the coming months, as noted, will largely depend on the actual impact of weather conditions on the supply and prices of agricultural products. “According to preliminary estimates of the NBU, in July, overall inflation may slightly increase, while core inflation will continue to decline. In the following months, inflation is expected to enter a trajectory of sustained slowdown,” the National Bank reported.

The NBU expects that inflation reduction will be facilitated by monetary policy measures, gradual increase in harvests, moderate external price pressure, and improvement in the labor market situation amid the stability of the foreign exchange market and sufficiency of international financing.

Economic recovery will be slower than last year – real GDP will grow by 2.1% in 2025

Further recovery rates, the National Bank noted, will depend on the course of the war. “The NBU’s baseline forecast scenario envisages a gradual return of the economy to normal operating conditions and economic growth at 2-3% in 2026-2027. At the same time, in the event of rapid normalization of conditions, private investment and consumption will significantly increase and compensate for the effects of rapid fiscal consolidation, and GDP growth rates may be 3-3.5%,” the statement reads.

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