The NBU kept its key policy rate at 15%

The National Bank of Ukraine (NBU) has kept its key policy rate at 15%. This was announced in a statement by the regulator.

According to the statement, this decision was made to maintain the attractiveness of hryvnia-denominated instruments, the stability of the foreign exchange market, and the manageability of inflation expectations amid mounting price pressures.

“Appropriate monetary conditions will help bring inflation back onto a path of sustained deceleration toward the 5% target over the policy horizon. Should risks to price dynamics intensify, the NBU will be ready to implement additional measures to curb inflationary pressures,” the regulator noted.

The NBU notes that inflation slowed steadily from June 2025 to January 2026, but subsequently began to rise. Price pressures intensified due to the difficult situation in the energy sector following Russian shelling, a sharp rise in fuel prices amid the war in the Middle East, the effects of the hryvnia’s depreciation in previous periods, as well as faster-than-expected wage growth.

In March, inflation accelerated to 7.9% y/y, and core inflation to 7.1%, with both figures exceeding the NBU’s previous forecast.

The National Bank expects inflation to remain near current levels in the coming months, but will accelerate in the second half of the year (to 9.4% by year-end; the January forecast for 2026 projected 7.5%) due to increased pressure on enterprises’ production costs, primarily driven by rising energy prices. Rising fuel prices will affect inflation both directly and through secondary effects.

The regulator expects inflation to return to a steady downward trajectory in 2027.

The NBU forecasts modest economic growth this year. Overall, real GDP growth in the first quarter, according to the regulator’s estimates, slowed to 0.2% year-on-year.

Increased budget spending as international aid flows in will help revive the economy over the coming months. At the same time, given the weaker first-quarter results, the still-precarious state of the power grid, and the mounting negative effects of the war in the Middle East, the GDP growth forecast for 2026 has been revised down to 1.3% from 1.8% in the January review.

The National Bank cites the consequences of Russian aggression as the main risk to inflation dynamics and economic development, though other geopolitical factors will also have an impact, particularly the situation in the Middle East

As reported by GMK Center, Ukraine’s real GDP growth in 2025 slowed to 1.8% from 3.2% in 2024. Ukraine’s nominal GDP last year stood at 8.93 trillion UAH.