The National Bank of Ukraine has published its October Inflation Report, detailing its analysis and forecast for the macroeconomic outlook. The projections assume that Ukraine meets its commitments under cooperation programmes with international partners, logistics improve from mid-2027, and security risks gradually ease toward the end of the forecast period. The risk of further losses from Russian attacks remains high.
The central bank forecasts inflation of 12.5% in 2026, falling to 7.3% by the end of 2027 and to the 5% target in 2028. Higher fuel costs and damage to production and logistics infrastructure will continue to raise business costs and put pressure on prices. A projected expansion of fiscal stimulus at the end of the year is also expected to add to price pressures.
Real GDP is forecast to contract by 0.4% in 2026, then grow by 0.4% in 2027 and 2.2% in 2028. Damage to production, energy and logistics infrastructure will constrain the recovery. State investment in the defence industry and the restoration of critical infrastructure are expected to support growth in 2027.
Labour shortages are expected to persist, although weaker economic activity has reduced businesses’ demand for workers. The bank projects real wage growth of 11.4% in 2026, slowing to 4–5% a year in 2027–2028. Its forecast assumes a net population outflow of about 0.2 million people annually in 2026 and 2027, followed by the net return of about 0.1 million migrants in 2028.
The budget deficit, excluding grants from revenue, is projected at about 35% of GDP in 2026 and 37% in 2027, before narrowing to 20% in 2028. International aid is expected to remain the main source of financing. The central bank forecasts international reserves above 62 billion US dollars at the end of 2026 and 2027, and about 57 billion dollars in 2028.
The report also assesses the impact of intensified Russian attacks and the blockade of ports. The National Bank estimates that these factors could leave real GDP in the third and fourth quarters of 2026 1.9 percentage points below the level it might otherwise have reached, while annual inflation could be 0.7 percentage points higher. Losses to the external trade balance may reach 6.6 billion US dollars, mainly because of lower agricultural exports.
From July to October 2026, the National Bank raised its key policy rate from 15% to 16.5% to support the appeal of hryvnia savings and limit pressure on the foreign exchange market. The report also examines how big data and artificial intelligence are expanding the bank’s analytical capabilities and helping it identify economic changes sooner.
