Marina Lubimova
The National Bank of Ukraine expects inflation to reach 9.4% by the end of 2026, up from current levels, before slowing to 6.5% in 2027 and returning to its 5% target a year later.
In its latest Inflation Report, the central bank cited higher energy costs, wage growth, and the impact of earlier hryvnia depreciation as the main drivers behind the expected acceleration in prices. The forecast arrives as another closely watched indicator remains elevated.
Ukraine's M3 money supply expanded 14.5% year-over-year in April, according to National Bank of Ukraine data compiled by economist Steve Hanke. That is well above Hanke's estimated "Golden Growth Rate" of roughly 9.3%, a level he argues is consistent with long-term price stability.
The gap does not automatically translate into higher inflation. Ukraine's economy is being shaped by factors that go far beyond monetary policy, including wartime spending, foreign financial assistance, reconstruction needs, and repeated shocks to the energy sector.
Still, the divergence is difficult to ignore. While the NBU expects inflation to move back toward target over the next two years, money supply growth remains closer to the levels seen during periods of stronger inflation pressure. For supporters of the monetarist approach, that raises questions about how quickly price growth can return to 5%.
| Year | Inflation |
| 2026 | 9.4% |
| 2027 | 6.5% |
| 2028 | 5.0% |
Despite elevated monetary growth, the National Bank expects inflation to gradually return to its 5% target by 2028.
The central bank expects inflation to begin easing in 2027 as pressure from energy prices fades, harvests improve, and monetary conditions remain restrictive. Officials also plan to keep the key policy rate at 15% until at least the second quarter of 2027.
For now, Ukraine's inflation outlook rests on a simple assumption: price pressures will cool faster than liquidity growth becomes a problem. Whether that assumption holds will be one of the more important macroeconomic questions over the next 18 months.
Marina Lubimova
