**Ukraine’s Central Bank Holds Key Rate Steady Amid War Risks**
The National Bank of Ukraine has kept its key interest rate at 15.5% for the third consecutive meeting, citing concerns about the country’s economic growth due to ongoing Russian attacks. In a statement, the central bank said that it expects inflation to continue to ease but warns that wartime risks will constrain economic growth.
**Slower Economic Growth Predicted**
The bank has revised its forecast for this year, predicting a slower economic growth of 2.1% compared to an initial estimate of 3.9%. The revision is due to more intense Russian attacks in recent months, which have devastated the economy and hindered production facilities, infrastructure, and housing.
**Public Spending and Foreign Aid Support Economy**
Despite these challenges, public spending and a steady inflow of international aid have helped the economy in the first half of the year. The government has received $24 billion out of $54 billion expected in aid in 2025, which is crucial for financing social and humanitarian spending.
**War Heats Up, Staff Shortages Worry Officials**
The war between Ukraine and Russia has escalated in recent months, with swarms of drones launched by both sides. Fighting has been intense along over 1,000 km (600 miles) of territory, casting doubts on the prospects for peace. The conflict has also led to staff shortages amid persistent emigration.
**Bad Weather Weighs on Growth Prospects**
In addition to the war, bad weather has delayed crop sowing and hampered future harvests in Ukraine’s farm business, which is a major sector of the economy. This has further weighed on growth prospects.
**Inflation Forecasts Revised**
The central bank also revised its inflation forecast for 2025, predicting it will reach 9.7% at the end of the year. It expects inflation to slow down to 6.6% in 2026.
**Government Works with IMF on New Lending Program**
The government is working with the International Monetary Fund (IMF) to develop a new lending program for Ukraine. This comes as the country’s economy continues to rely heavily on international aid due to the ongoing war.
In summary, the National Bank of Ukraine has kept its key interest rate steady amid concerns about economic growth due to Russian attacks. The bank predicts slower economic growth this year and revised inflation forecasts, while public spending and foreign aid continue to support the economy.
