The National Bank of Ukraine raised its key policy rate by 0.5 percentage points to 16.5 percent, its third consecutive increase after moves in July and September, citing a significant increase in price pressures and a deterioration in inflation expectations. The bank said the pressure came from the surge in fuel prices caused by the war in the Middle East and from intensified Russian attacks on warehousing and logistics. Headline inflation accelerated to 10.0 percent year on year in September and core inflation to 8.8 percent, both above the bank’s July forecast, and the bank’s estimates show the trends continuing in October.
The forecast moved with the decision. The bank raised its 2026 inflation forecast to 12.5 percent, with aerial attacks alone adding about 0.7 percentage points, and cut its 2026 growth forecast to a contraction of 0.4 percent after estimating that real GDP fell 0.5 percent year on year in the third quarter, when a sea port blockade and attacks on production facilities hit metallurgy and ore mining hardest. Inflation is expected to slow to 7.3 percent in 2027 and return to the 5 percent target in 2028, and the bank’s forecast holds the rate at its current level until the second quarter of 2027. The next decision is on December 17, 2026.