**Ukraine’s Central Bank Keeps Interest Rate Steady Amid Wartime Uncertainty**
The National Bank of Ukraine has decided to keep its key interest rate unchanged at 15.5% for the third consecutive meeting. This decision was made in a bid to control inflation, which is expected to continue easing.
Inflation has started to decline as predicted in June and is likely to slow down significantly by the end of the year. According to Governor Andriy Pyshnyi, holding the key policy rate steady at 15.5% is essential for achieving a sustainable slowdown of inflation towards its 5% target.
**Economic Growth Forecast Slashed**
However, the central bank has cut its forecast for economic growth in 2025 due to more intense Russian attacks in recent months. Ukraine’s economic growth is now expected to slow to 2.1% this year compared with 2.9% in 2024. In 2025, growth is predicted to be just 3.1%.
This decision reflects the increasing uncertainty and risks associated with the ongoing war. The central bank has emphasized that wartime conditions will continue to constrain economic growth.
**Inflation Projections**
The central bank expects inflation to reach 9.7% at the end of this year, before slowing down to 6.6% in 2026 and finally reaching the target rate of 5% in 2027.
This news comes as a mixed bag for Ukraine’s economy, with some signs of stability amidst continued uncertainty. The central bank’s decision to keep interest rates steady will likely have implications for businesses and consumers alike.
**A Closer Look**
While the central bank’s forecast for economic growth may seem disappointing, it’s essential to consider the broader context. Ukraine is facing a prolonged conflict, which has significant consequences for its economy. The central bank’s cautious approach reflects this uncertainty and their commitment to maintaining stability in these challenging times.
Read More @ www.reuters.com
