The Central Bank kept the prime rate at 25% and improved its economic forecast.

The Board of the National Bank decided to keep the discount rate at 25% per annum, the Chairman of the Board of the NBU, Andriy Pishniy, said. The NBU noted that the updated macro forecast foresees the beginning of the discount rate reduction cycle in the fourth quarter of 2023.

In addition, against the background of the energy system’s rapid recovery and soft fiscal policy, the NBU improved the 2023 forecast for economic growth from 0.3% to 2%. Furthermore, the reduction of security risks next year will contribute to the acceleration of economic growth by up to 4.3% in 2024 and up to 6.4% in 2025, the NBU says.

As a result, the forecast for annual inflation in 2023 has also improved significantly and will slow down to 14.8%, compared to 18.7% in previous estimates. The central bank expects inflation to decrease to 9.6% in 2024 and 6% in 2025.