The Ministry of Finance: Inflation of 22.2% is not critical for a country at war

Inflation at 22.2% in Ukraine is not critical for a state defending itself in a war.

The Minister of Finance, Serhiy Marchenko, stated this in an interview with "RBK-Ukraine".

"Inflation is quite high, if compared with the pre-war situation. If we compare with other countries — Europe, the USA, where inflation is approaching ten percent, then our inflation of 22.2% is not so critical. That is, it is not inflation, which could be in a country at war," the minister noted.

He is convinced that despite the war, external conditions in the world are such that Ukraine would still have high inflation.

The minister believes that inflationary risks, in particular due to the issue of the hryvnia, should not be a priority when it comes to supporting the army. In any case, the Ministry of Finance cannot stop payments to the military, and therefore counts on the support of the National Bank of Ukraine (NBU).

At the end of July, the National Bank issued a forecast according to which inflation will exceed 30% by the end of the year. The National Bank hopes that inflation will slow down next year thanks to the improvement of trade logistics and the gradual growth of harvests. An additional impact will be the decrease in global inflation and the tight monetary policy of the NBU. At the same time, the slowdown in inflation will restrain the high cost of gas and oil and the need to gradually reduce tariffs for the population to the market level. As a result, consumer inflation will decrease to about 20% in 2023 and will fall to single-digit levels only at the end of 2024.

• In May, the National Bank announced Ukraineʼs losses during the war — more than $92 billion, that is, about half of last yearʼs gross domestic product.