Ukraine central bank to improve 2023 inflation, GDP forecasts on robust agriculture

Ukraine’s central bank will improve its forecasts for inflation and gross domestic product growth for this year at its monetary meeting this month because the situation in the agricultural sector is better, a deputy governor of the bank said.

Serhiy Nikolaichuk said during an online interview with the Forbes-Ukraine publication on Wednesday that the inflation rate was slowing faster than initially expected and the economy was doing better, mainly thanks to the favourable situation in the agricultural sector.

Nikolaichuk declined to give exact figures, saying they would be announced at the monetary meeting scheduled for Oct. 26.

The central bank has previously said it expects GDP to grow by 2.9% this year after falling by 29.1% last year. Inflation is forecast to reach 10.6% this year.

The central bank this week scrapped an official peg of the hryvnia currency to the dollar which was introduced after Russia’s full-scale invasion in February 2022. The currency had been pegged at 36.57 to the dollar since July 2022.

Since the easing of the peg, the hryvnia has traded close to official levels. The central bank’s governor, Andriy Pyshnyi, said after the first day of trading that the National Bank of Ukraine had sold as many dollars as was needed to meet the demand for hard currency on the foreign exchange market.

“Our task is to maintain exchange rate stability. I am certain that when the market understands that the central bank does not plan to let the hryvnia float freely, the interventions will gradually stabilize,” he said in a post on Facebook (NASDAQ:META).