Ukraine's economy 'still standing' despite massive deficits - NBU Chief

When asked to characterize the country's position at the beginning of 2026 in a single word, Pyshnyi chose one that resonates with every Ukrainian: "Standing."

"Start positions for 2026 are determined by how we ended 2025, as well as current challenges," he explained.

Objectively difficult situation

Pyshnyi was blunt about the hurdles ahead.

"First, the challenges," he noted.

"We understand that the situation is objectively difficult. The intensity and aggressiveness of Russian attacks have increased. We are facing the coldest winter and a state of emergency in the energy sector. The economy is recovering quite slowly, and deficits in the state budget and current account are huge. Plus, we have unprecedented uncertainty."

However, he emphasized that Ukraine now possesses four years of invaluable experience in managing a macro-financial system under full-scale war conditions.

Inflation and Banking

Despite these severe background, Pyshnyi emphasized that Ukraine has leveraged four years of war-time management experience to achieve critical stability, particularly in curbing inflation and strengthening the banking sector.

• Inflation peaked at nearly 16% in May 2025. NBU responded with a timely tightening of interest rate policy, ending the year with inflation at 8% — better than predicted. The trend is now moving toward the 5% target.

• Banking Sector: The system remains "operationally stable, liquid, capitalized, and profitable." Lending to both businesses and individuals grew by 35% last year, a dynamic NBU aims to scale in 2026.

International Reserves

NBU Chief called international reserves the key indicator of the country's resilience.

"We ended the year with a historic maximum of $57.4 billion. In January, this figure rose to $57.7 billion. for comparison: at the start of the full-scale invasion, reserves stood at $27.4 billion," he said.

Current reserves cover nearly six months of future imports. NBU forecasts reserves to reach $65 billion by the end of 2026 and $71–73 billion by 2027–2028.

"This macroeconomic framework, supported by reduced risks to external financing and the unprecedented resilience of the population and business, allows us to conclude: Ukraine has a safety margin," Pyshnyi stressed.

NBU earlier improved its 2025 inflation forecast to 9.2% (down from 9.7%) and maintained its 2026 forecast at 6.6%. Consumer price growth slowed significantly by the end of 2025, with the regulator predicting inflation will drop to 6% in 2027.