The Central Bank of Ukraine expects inflation to accelerate at the beginning of the year.

In the first months of 2025, inflation will likely continue to accelerate because of lower harvests, pressure from business spending on energy supplies and labor, and the effects of a weakening hryvnia exchange rate, says an NBU forecast.

It also acknowledges that the inflation rate of 12% at the end of 2024 turned out to be higher than the forecast of 9.7% published in the October Inflation Report. However, the National Bank expects inflation to return to a trajectory of sustained deceleration in the second half of 2025 and will move towards the NBU’s target of 5%.

The slowdown in inflation will be facilitated by measures of the National Bank’s interest rate and exchange rate policy, higher harvests, an improvement in the energy situation, a decrease in the fiscal deficit, and moderate external price pressure.

The NBU will present an updated forecast for inflation dynamics on January 23.