Overview
- The National Bank of Ukraine left its policy rate at 15 percent but said it is prepared to raise rates if price pressures do not ease.
- Headline consumer inflation slowed to 8.2 percent in May while core inflation, which strips out volatile food and energy items, rose to 7.9 percent and exceeded forecasts.
- The bank pointed to higher energy costs from regional conflicts, earlier hryvnia depreciation, and continued wage growth from labor shortages as the main drivers of persistent price pressure.
- The NBU has cut its 2026 GDP forecast to about 1.3 percent after winter damage to energy infrastructure reduced output and raised reconstruction import needs.
- Policymakers said stabilizing energy prices, larger harvests, and tight monetary policy should bring inflation toward 5 percent by 2027 but warned that higher borrowing costs will affect household spending and the cost of rebuilding.