The hryvnia’s purchasing power will drop by at least half.

According to the head of the National Bank, Kyrylo Shevchenko, even the current 22.2% consumer inflation per year is a significant reduction, by almost a quarter, of the real disposable income of citizens. According to the NBU’s forecast, inflation will exceed 30% in 2022, decrease to 20% next year, and only in 2024 might decrease to a single-digit level. Thus, over these three years, the purchasing power of the hryvnia will decrease by almost half. Shevchenko also said that even this scenario will require a lot of effort to bring about because the war’s results on the economy could be much worse. In addition, it is necessary to reduce the devaluation of the hryvnia and take measures to reduce the budget deficit, “no matter how unpopular these measures look.” Otherwise, the head of the NBU predicts that Ukraine will slide into a permanent crisis with an inflationary-devaluation spiral.