The economy of Ukraine is projected to grow by 4.9% in 2025, accompanied by a slight decrease in the inflation rate compared to this year, dropping to 8%, according to a macroeconomic forecast shared by Raiffeisen Bank (Kyiv) Chairman Oleksandr Pysaruk.
"Regarding the dollar exchange rate, we anticipate a devaluation of around 8% in 2025, with the rate at the end of 2025 expected to be 45.5 UAH/$1. The baseline scenario is based on the hypothesis that security risks will improve in the second half of 2025," he said in an interview with the "Interfax-Ukraine" agency.
Pysaruk noted that the bank always conducts stress tests considering not only the baseline scenario but also the best and worst-case scenarios.
"However, we do not have two fundamentally different development scenarios. All preliminary forecasts regarding the end of the war have not materialized. The head of the National Bank of Ukraine mentioned this at a meeting of the European Business Association, and I am ready to endorse his words that we should stop making predictions and making mistakes, and simply focus on our work," he emphasized at the same time as the chairman of Raiffeisen.
In his view, even if a ceasefire occurs at the end of the first quarter, it will not significantly impact the indicators for 2025.
"It may affect 2026. Even such critical events have an effect with a certain lag. The current dynamics of inflation growth and the need to curb it will influence 2025," Pysaruk believes.
He added that he would not be surprised if the National Bank had to raise the interest rate due to inflation accelerating more rapidly than expected.
"Regarding deposit and lending rates in UAH, we do not anticipate significant deviations from current levels," the banker indicated.
He reminded that this process began back in July, and the main factor is the dynamics of the NBU's interest rate, which is likely to remain stable until mid-summer 2025.
"However, deposit rates in US dollars and euros may decrease somewhat in response to the respective decisions of the Fed and the ECB, although they remain quite low in Ukraine," the Raiffeisen Bank chairman suggested.
Commenting on the impact of the front-line situation on the sentiments of the population and businesses, he noted that it is reflected in the currency market.
"We are witnessing a significant increase in demand for cash currency, although the supply also remains high. This leads to increased interventions by the National Bank, which, fortunately, has reserves built from international monetary assistance," Pysaruk stated.
According to him, the current situation appears to be quite manageable, as external assistance next year seems sufficient to finance the budget deficit and replenish the NBU's foreign currency reserves.
The chairman also reported that Raiffeisen Bank remains the main supplier of cash currency to Ukraine.
"As for who is number two, I honestly don't know, as the gap is enormous. This is a complex business—you need to know the counterparties and ensure logistics. We have been doing this for decades," he noted.
As reported, Ukraine's GDP grew by 5.3% in 2023, according to State Statistics, following a decline of 28.8% in 2022. The National Bank of Ukraine raised its economic growth forecast for 2024 from 3.7% to 4% and for 2025 from 4.1% to 4.3% at the end of October. Simultaneously, the NBU downgraded its inflation forecast for 2024 from 8.5% to 9.7% and for 2025 from 6.6% to 6.9% after it fell to 5.1% in 2023, following a spike to 26.6% in 2022.
The National Bank of Ukraine (NBU) lowered the official exchange rate of the hryvnia to 41.6010 UAH/$1 on November 27, marking the lowest value in its history. Overall, since the beginning of 2024, the dollar has appreciated by 9.5%, or 3.59 UAH, at the official exchange rate, and since the National Bank transitioned to a managed float regime on October 3, 2023, it has increased by 13.8%, or 5.03 UAH.