The NBU will revise its 2023 forecasts for GDP and inflation toward improvement.

As the Deputy Chairman of the NBU, Serhii Nikolaychuk, noted, the situation in the agricultural sector has contributed to the positive changes. “In recent months, inflation has been falling more rapidly than we predicted in our July macroeconomic forecast,” he said.

Regarding GDP, the situation is also better than the NBU expected in July. “The main factor for lower inflation is the larger-than-expected harvest, which significantly lowers food prices,” Nikolaychuk said. The NBU will announce the exact figures after the board meeting on the discount rate on October 26.

In July, the National Bank predicted that inflation at the end of the year would be 10.6%. But in August, annual inflation slowed to 8.6%. As for GDP, in July the regulator expected a final GDP growth of 2.9%.

Also, against the background of the latest situational changes, the NBU predicts that the transition to managed exchange rate flexibility will temporarily deteriorate inflation expectations. After that, the situation will stabilize.