Inflation and slowing GDP growth: National Bank significantly worsens economic forecast

The National Bank has worsened its economic forecast. Inflation will take longer to decline, and the economy will recover more slowly.

This was reported by the press service of the National Bank.

Overall inflation may even temporarily increase in July, but should enter a steady downward trajectory in the fall.

In addition, the National Bank worsened the macroeconomic forecast and warned that inflation will slow down for longer and economic recovery will slow down.

According to the updated forecast, inflation will fall by 2027, when it will reach 5%.

The deterioration in the inflation forecast is caused by:

• greater military losses than previously expected;
• increasing the cost of business and passing these costs on to final prices;
• the weakening of the hryvnia against the euro and worse harvest prospects due to weather anomalies.

The NBU also worsened the GDP growth forecast in 20255 to 2.1% and to 2-3% in 2026-2027 if the war continues.

Among the main factors that influenced the GDP forecast:

• stable external financing that supports economic growth;
• increased shelling and further destruction of production facilities, infrastructure, and housing;
• adverse weather conditions that delayed the harvest and limited crop prospects.

Previously, the World Bank downgraded Ukraine’s GDP growth forecast for 2025 to 2% from 2.9% this year and downgraded its estimate of its acceleration next year to 5.2% from 7% .

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