Economy

There will be more light: the NBU predicts less electricity shortage

Thanks to rapid repairs of shunting generation and energy infrastructure, the development of distributed power generation and renewable energy capacities, the electricity shortage will be less than previously expected. This is stated in the April inflation report of the NBU, reports [Kommersant].

In 2025, the National Bank estimates the electricity deficit, including imports, at 3%, which is 1% less than forecasted in January, and in 2026, the deficit is expected to be 1%, although the January report forecasted 2%. In 2027, the NBU estimates that the electricity deficit will almost disappear: the forecast is 1%.

Thus, according to the NBU, the negative contribution of energy supply restrictions to real GDP will decrease. Annual electricity imports will amount to about $0.5 billion in 2025-2027.

More gas will have to be imported

Russia’s attacks have destroyed the gas infrastructure, which has already led to a reduction in gas production.

According to the NBU, production will gradually recover, but it will not be enough to fully cover the domestic needs of the economy – both industry, housing and utilities, and households.

As a result, gas imports will increase in 2025 and amount to USD 2.9 billion. Subsequently, the need for its purchases will decrease to about USD 1.1 billion in 2026 and about USD 0.4 billion in 2027. It is expected that part of the gas imports will be financed by the assistance of international partners.

What will happen to gas tariffs?

The NBU expects that the current tariffs for gas, heating, and hot water will not be revised this year. However, the difficult situation in the energy sector and fiscal consolidation are likely to lead to a gradual adjustment of these tariffs in the coming years. In particular, it is assumed that they will begin to be gradually brought to economically justified levels in 2026.

The NBU believes that further postponement of tariff increases will lead to lower inflation, but will accumulate quasi-fiscal imbalances and worsen the financial condition of state-owned energy companies. At the same time, the risks of instability in the energy market will increase, the investment potential of the industry will deteriorate, and price pressure will only be postponed to the future.

On the other hand, a sufficiently rapid and significant increase in energy costs to eliminate imbalances in the energy sector will increase inflationary pressure in the relevant period and will require an increase in subsidies for the population.

As reported by [Kommersant], the NBU expects inflation to drop to single-digit levels by the end of 2025, which will be achieved through monetary policy measures, new higher harvests, and an improvement in the energy sector. In the summer, year-on-year price growth will begin to slow for a wide range of goods and services.