The National Bank of Ukraine (NBU) left its key policy rate unchanged at 15.5% for the fifth consecutive meeting and downgraded its economic growth outlook, citing persistent inflation expectations and mounting risks from the ongoing war, reported Ukraine Business News.

The central bank said on Thursday that despite a slowdown in inflation, it would maintain tight monetary policy to safeguard currency stability, support hryvnia savings and guide inflation toward its 5% target. “The NBU will maintain relatively tight monetary conditions to support the stability of the foreign exchange market, make savings in hryvnia more attractive, and ensure a steady decline in inflation to the 5% target over the policy horizon,” it said.

The regulator cut its GDP growth forecast for 2025 to 1.9%, the fourth downgrade this year. It warned that energy shortages, higher public spending needs and ongoing hostilities remain the primary risks to price stability and economic recovery.

The bank expects moderate recovery over the next few years, supported by better harvests, investment in reconstruction and defence, and progress in European integration. It projects GDP growth of 2% in 2026 and 2.8% in 2027.

Inflation is forecast to ease to 9.2% this year, 6.6% in 2026 and reach the 5% target by the end of 2027. However, the bank warned that high inflation expectations and war-related uncertainty could derail progress.

The NBU suspended its floating exchange rate at the start of the war in 2022, later allowing limited fluctuations. The hryvnia has lost about 13% of its value against the US dollar since then.