NBU improves inflation forecast for year end

The National Bank of Ukraine (NBU) estimates that inflation will reach 5.8% by the end of 2023.

NBU's Governor Andriy Pyshnyy announced this, an Ukrinform correspondent reports.

"The NBU has improved its inflation forecast for the end of 2023 from 10.6% to 5.8%. The main factor behind this revision is the impact of high harvests on the dynamics of food prices. At the same time, the NBU raised its inflation forecast for 2024 from 8.5% to 9.8%," Pyshnyy said.

He noted that the acceleration of price growth next year will be driven by this year's low comparison base for food prices, continued pressure on business costs due to revised assumptions about security risks, higher wages, and accelerated growth in administered prices.

According to the NBU Governor, inflation will further slow to 6% in 2025. This will primarily be facilitated by the expected reduction in security risks, as assumed by the NBU's forecast. The restoration of optimal logistics and production in the post-war period will help to increase the supply of goods and limit price pressure. The expected decline in global energy prices will also have a significant impact on price dynamics.

As Ukrinform reported, in the spring, the NBU improved its inflation forecast for this year from 14.8% to 10.6%, and its economic growth forecast for 2023 from 0.3% to 2%.