Updated Macroeconomic Projections from the National Bank of Ukraine
The National Bank of Ukraine has released its revised macroeconomic forecast for 2026–2028, warning that inflation will climb and economic growth will slow in 2026 due to strikes on energy infrastructure and an unusually cold winter, with recovery expected only in 2027–2028. In March 2026, annual inflation accelerated to 7.9%, while core inflation stood at 7.1%. The central bank now projects inflation at 9.4% for 2026, 6.5% for 2027, and 5% for 2028. Its long-term strategic target remains an inflation rate of 5%.
At the same time, the National Bank downgraded its 2026 real GDP growth forecast to just 1.3%. The slowdown is attributed to Russian attacks on power infrastructure and logistics hubs, compounded by a severe winter.
“Economic activity slowed at the start of 2026, primarily due to the fallout from Russian strikes on energy infrastructure and logistics facilities against the backdrop of a very cold winter,” the National Bank of Ukraine noted.
Global factors are also weighing on the outlook, particularly instability in fuel markets linked to the conflict in the Middle East.
“Given the weaker-than-expected first-quarter results, the still-fragile state of the power grid, and the accumulating negative economic effects from the Middle East war, the National Bank has revised its 2026 GDP growth estimate down to 1.3%,” the bank added.However, real GDP growth is expected to pick up to between 2.8% and 3.7% in 2027–2028.
Key Challenges Facing Ukraine’s Economy
Several critical challenges are putting pressure on the economy:
- a severely damaged energy system that restricts industrial output;
- rising logistics and backup-generation costs, which squeeze profit margins;
- negative spillovers from the Middle East situation, which raise the price of imported inputs.
“Inflation will return to a steady downward trajectory as early as next year,” the National Bank of Ukraine stated, signaling a potential improvement in the economic outlook over the coming years.
The updated forecast from Ukraine’s central bank reflects the harsh realities of war and global crises. Slower economic expansion and rising inflation underscore the serious hurdles to recovery, calling for strategic policy measures and continued state support. At the same time, projections for the following years hint at a possible rebound—provided the key problems in the energy sector are resolved and external market conditions improve.