The National Bank of Ukraine has begun easing monetary policy by cutting its key rate by 50bps to 15% in January 2026, reflecting easing inflationary pressures and reduced risks to external financing, while still aiming to return inflation to its 5% target over the medium term. Inflation slowed to about 8% year on year by the end of 2025 due to strong harvests, easing labor market pressures, and a stable FX market, and it is expected to keep declining in early 2026 before temporarily accelerating in the second half because of energy-sector damage and low base effects, ending 2026 at around 7.5%, falling to 6% in 2027 and reaching 5% in 2028. Economic growth remains modest due to the war, about 1.8% in 2025–2026, but should accelerate to 3–4% in 2027–2028 as reconstruction, investment, and energy recovery progress.
