National Bank of Ukraine improves 2023 inflation outlook to 18.7%

MOSCOW. Jan 26 (Interfax) - The National Bank of Ukraine has improved its inflation forecast for 2023 to 18.7%, from the 20.8% it was predicting in October, Ukrainian media reported, quoting an NBU press release.

"The NBU forecasts inflation will slow to 18.7% in 2023, supported by monetary conditions remaining tight, global inflation declining, and consumer demand being dampened by power outages," the regulator said.

Inflows of international assistance and joint efforts of the NBU and the government "to revive the domestic debt market will help avoid monetary financing of the budget deficit and balance the FX market," it said.

In the coming years, inflation will decelerate more rapidly thanks to subsiding security risks, proper recovery of logistics, and larger harvests. The NBU expects inflation to decline to 10.4% in 2024 and 6.7% in 2025.

"The administered prices component will make a major contribution to inflation during these years due to the need to bring utility tariffs to market levels," the NBU said.

In the past three months, inflation remained almost unchanged in annual terms. An increase in supply of food products, measures taken by the NBU and dampened consumer demand helped stabilize the inflationary pressure.