ICU predicts hryvnia exchange rate of 43.5 UAH/USD with inflation of about 8% by late 2025

ICU predicts hryvnia exchange rate of 43.5 UAH/USD with inflation of about 8% by the end of 2025.

This is stated in the ICU report, Ukrainian News Agency reports.

The revised forecast of the receipt of external financial assistance, which is disclosed in the IMF memorandum, is a significant positive for Ukraine.

The financial assistance package has been increased by USD 15 billion compared to the December plan, and the receipt of funds will be shifted to a greater extent than previously planned to 2025.

"Ukraine will receive more than USD 50 billion this year, so the NBU reserves will grow sharply, and the central bank will have more resources to support the hryvnia exchange rate. Therefore, we are increasing the forecast of the hryvnia exchange rate at the end of 2025 to 43.5 UAH/USD," the report says.

At the same time, the hryvnia exchange rate at the end of next year is forecast at 47.9 UAH/USD.

Annual inflation will begin to slow down sharply from June due to the effects of last year's high base and higher supply of agricultural products.

"We see a slowdown in consumer prices to 7-8% at the end of the year, taking into account a certain slowdown in consumer demand, a relatively stable hryvnia exchange rate and cheaper food products. The NBU will maintain the discount rate at the current level until September, and then, probably, will reduce it three times by 50 bp by the end of the year," the ICU noted.

The Ukrainian economy has been in a slow growth mode since the 3rd quarter of 2024, and the chances of a significant acceleration of the recovery rate are very low.

The need to gradually reduce the budget deficit and, accordingly, government spending will significantly limit economic growth in the future.

The company expects the economy to grow by 3% this year and next, thanks to the recovery of household consumption and higher harvests.

As Ukrainian News Agency earlier reported, exchange rate and inflation expectations and a shortage of qualified personnel are holding back business expectations.