The National Bank of Ukraine improved the inflation forecast for 2023 from 18.7% to 14.8% and raised the projected growth of the country's gross domestic product to 2%. Such data were published in the macro-financial report of the NBU dated April 27.

The National Bank notes that since the beginning of the year, inflation has been declining faster than expected, which makes it possible to adjust the annual forecast.

“However, due to the impact of the war, price pressure remains high, and production costs remain significant, including due to difficulties in doing business and setting up logistics in a war,” the regulator notes..

It is expected that inflation will be reduced by the combined effect of cheaper energy resources on world markets, restrained domestic demand, as well as the impact of the NBU’s monetary policy.. The National Bank believes that in subsequent years the inflation rate in Ukraine will be below 10%, and the economy will return to growth this year.

In particular, the forecast for the growth of the gross domestic product has been improved - from 0.3% in the January forecast to 2.0%.

This improvement in the forecast at the NBU is justified by the likely stability in the operation of the energy system and the increase in international financial assistance, which will support economic activity..

Maintaining high security risks by early 2024 remains the main driver of the positive outlook.

" The key risk to this outlook remains the longer duration and intensity of the war.. They can have a significant negative impact on economic activity, as well as lead to a deterioration in inflation and exchange rate expectations,” said Andriy Pyshny, head of the National Bank..

Also among the factors that may affect the reality of the forecast are the emergence of additional budgetary needs and significant quasi-fiscal deficits in the energy sector, the complication or termination of the "

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At the same time, the NBU says that the receipt of a significant amount of financing for recovery can create conditions for easing foreign exchange restrictions..

Taking into account these risks, high uncertainty and expected significant expenditures of the state budget and a number of other factors, the NBU board decided to keep the discount rate at 25%.