Ukraine's Central Bank Outlines Path to Lower Inflation and Interest Rate Cuts by 2026

Inflation Begins to Fall in Ukraine

According to НБУ: Deputy Governor of the National Bank of Ukraine (NBU), Volodymyr Lepushynskyi, has announced that a decline in inflation began in June 2025. This positive trend follows a difficult 2024 harvest that drove up food prices significantly. Improved agricultural conditions in 2025 have now led to a slowdown in the growth of food costs.

NBU's Future Forecasts

The NBU expects this disinflation to continue into 2026. According to its October forecast, a cycle of reductions to the key policy rate is projected to start in the first quarter of 2026. Lepushynskyi emphasized that this is just one of several factors contributing to lower inflation. The central bank traditionally analyzes the situation comprehensively.

An updated macroeconomic forecast and a decision on the key policy rate are scheduled for release at the end of January. This indicates the Ukrainian economy's ongoing recovery, with the NBU observing positive trends in reducing inflationary risks. For international observers, this signals a potential shift towards monetary easing as the economy stabilizes after wartime shocks.

The decline in inflation in Ukraine is an important signal for the economy, as lower food prices can positively impact the population's standard of living. - Volodymyr Lepushynskyi

Expectations for a lower key policy rate also point to the NBU's intent to support economic growth, which could boost investment activity and consumer demand. The updated macroeconomic forecast to be presented in January will provide greater clarity on the future trajectory of Ukraine's economy.