The National Bank of Ukraine has raised its inflation forecast for the end of 2026 to 12.5% year-on-year. This was announced by Regulator Head Andriy Pyshnyy during a monetary briefing on October 29, noting that the previous estimate, recorded as of July of this year, stood at 10%. Thus, the central bank has significantly revised its expectations regarding price dynamics, acknowledging that pressure on consumer prices has turned out to be stronger than previously assumed.
What Caused the Forecast Revision
According to the NBU head, the main factors driving inflation acceleration were enemy shelling, rising fuel prices, and fiscal stimuli — state economic support programs. The regulator estimated the contribution of shelling to inflation acceleration at 0.7 percentage points. Pyshnyy added that further price growth is expected to be contained by a projected decline in global oil prices, as well as monetary policy measures that the regulator continues to implement.
Link to the Policy Rate and GDP Forecast
The revision of the inflation forecast comes against the backdrop of monetary policy tightening: the NBU has once again raised its policy rate by 0.5 percentage points to 16.5%. Simultaneously, the regulator worsened its macroeconomic forecast: instead of the previously expected GDP growth in 2026, a contraction of 0.4% is now projected, while a return to 0.4% growth is expected only in 2027. According to NBU estimates, in the third quarter real GDP contracted by 0.5% year-on-year, which the regulator attributes primarily to the consequences of maritime port blockades and attacks on production facilities and logistics; metallurgical and ore enterprises suffered the greatest losses, and the negative contribution of intensified shelling to GDP is estimated at 1.9 percentage points.
Target Benchmark and Stabilization Horizon
The baseline indicator targeted by the regulator remains 5% per annum. Achieving this target inflation level, according to Andriy Pyshnyy, is expected in 2028. Thus, the NBU bakes a phased slowdown in price growth into its forecast: following a peak value of 12.5% in 2026, inflation should gradually decline toward the target benchmark over the next two years.
September Price Dynamics and the Situation at Filling Stations
The context of the forecast revision is also confirmed by statistics: in September, inflation reached 10% year-on-year, which is 2.1 percentage points higher than the August figure, the State Statistics Service reported. Educational services, clothing and footwear, and food products experienced the highest price increases over the month. At the same time, fuel prices at filling stations continue to rise: as of October 29, standard A-95 gasoline in Ukraine's largest networks cost UAH 88.9–95.9 per liter, standard diesel fuel cost UAH 102.9–108, and the price of auto gas jumped to nearly 60 hryvnias, with OKKO network prices rising to UAH 59.9 per liter.
