Ukraine Holds Rates at 15% While Cutting 2026 GDP Forecast to 1.3% and Raising Inflation Outlook to 9.4%

Russia’s repeated strikes on Ukraine’s energy and logistics infrastructure have curtailed industrial output and pushed up fuel prices. The central bank says these supply shocks are the main driver of higher inflation and weaker growth. Analysts expect the rate to stay unchanged until at least mid‑2027 unless inflation pressures ease.

The policy rate remains at 15%. The 2026 GDP growth forecast was lowered from 1.8% to 1.3%. The 2025 inflation forecast was raised from 7.5% to 9.4%.

Keeping the rate at 15% aims to anchor inflation expectations, but persistent supply‑side pressure limits its effectiveness. As a result, real interest rates stay negative, which tends to weaken the hryvnia. The UAH/USD pair slipped 0.3% to 38.2 per dollar. Ukraine’s 10‑year bond yield (UAH10Y Index) rose 12 basis points to 9.8%, reflecting higher risk premiums. The PFTS Index, Ukraine’s main stock gauge, fell 0.6% to 558 points. The iShares MSCI Ukraine ETF (UKR) declined 0.5% to $21.80, with assets under management near $150 million. These moves show markets pricing in prolonged stagflation risk from the war.