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Prices may rise due to missile strikes – NBU

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In the event of longer blackouts, the macroeconomic forecast for next year will have to be revised for the worse, the National Bank has warned.

The energy scare from Russia led to further increases in business production costs. Because of this, the price of many goods may increase. It was reported on Monday, December 19, on the website of the National Bank.

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“Major attacks on energy facilities have become regular, and the time it takes to restore power grids has become longer. Power shortages have led to increased demand for fuel, which has led to increasing its cost. As a result of the destruction of the energy infrastructure, it can affect the cost of a wide range of goods and services “, – stated in the message following the meeting of the Monetary Policy Committee of the National Bank (KMP) in December 7, where it was decided to keep the discount rate at 25%.

The NBU noted that the weakening of consumer demand due to reduced incomes, significant additional costs for household needs in the face of power outages, savings on non-essential costs, as well as forced migration are partially inflationary pressures will be removed.

ILC members discussed several scenarios for further economic development, differing in the scale of the energy terror. In their opinion, the baseline scenario can be considered a continuation of the current situation with relatively successful protection of the Ukrainian sky with air defense and missile defense systems, relatively quick repair of damaged energy facilities and lack of electricity in within 25% of the requirement.

“However, even this scenario will have a negative impact on inflationary dynamics and slow economic recovery in 2023. In the event of scenarios with more serious damage to critical infrastructure and longer power outages, the macroeconomic forecast for the next year will have to be changed more significantly, which is likely to expect a continued fall in GDP,” warned the National Bank.

Earlier it was reported that the NBU recorded a weakening of economic activity. The main reason is the lack of electricity due to large-scale shelling of energy facilities.

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Source: korrespondent

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