At a meeting with companies participating in its business outlook surveys, the National Bank of Ukraine presented a weaker 2026 macroeconomic outlook and a tighter-for-longer monetary stance. It now expects inflation to rise to 9.4% by end-2026 before resuming a sustained decline in early 2027 and reaching the 5% target in 2028, while 2026 GDP growth has been revised down to 1.3%. The NBU also said its forecast path now keeps the key policy rate at 15% until Q2 2027. The shift reflects faster-than-expected price pressures and weaker activity. Inflation rose to 8.6% year on year in April 2026, driven by higher fuel prices amid the Mideast war and damage to the energy sector from Russian attacks, while the economy contracted 0.5% year on year in Q1 2026. The NBU recalled that it suspended its easing cycle in March 2026, kept the key rate unchanged in April 2026, and continued smoothing excessive exchange-rate moves under its managed flexibility regime. It also upgraded its end-2026 reserves forecast to USD 64.8 billion on the back of international assistance. On foreign exchange liberalization, the NBU said most stage-one measures have been completed, significant progress has been made on stage two, and some stage-three measures have started. Most current transactions are already liberalized, and foreign investors can invest in Ukrainian companies, lend to them, repatriate profits, and receive repayments. The stimulating liberalization framework has supported USD 707 million of transactions so far, while related FX purchases and cross-border transfers remain about 4% and 6% of totals. Further easing will be gradual, without fixed deadlines, and will depend on macroeconomic conditions and priorities including attracting investment.
National Bank of Ukraine2026-05-18
National Bank of Ukraine outlines 1.3% 2026 growth forecast and 15% key rate through Q2 2027
The National Bank of Ukraine presented a weaker 2026 outlook and tighter-for-longer stance, projecting 9.4% inflation and 1.3% GDP growth in 2026, with the key rate at 15% until Q2 2027 and inflation reaching the 5% target in 2028. It cited faster price pressures, weaker activity and ongoing exchange-rate smoothing, and upgraded its end-2026 reserves forecast to USD 64.8 billion. The NBU also reported substantial progress on FX liberalization, with most current transactions already liberalized and further easing to proceed gradually and conditionally.