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.