Housing and utility tariffs will not change next year – NBU forecast
8 November 12:52
The NBU expects that the current tariffs for gas, heating, and hot water will not be revised in 2024-2025. This is stated in the NBU’s Inflation Report, Komersant ukrainskyi reports.
As noted, uncertainty about the timing and amount of tariff adjustments, especially energy tariffs, is a separate risk to the inflation forecast.
“In the event of a rapid increase in the cost of energy or other utility tariffs, an additional contribution to inflation will be formed, and there will be a need to increase subsidies for the population. Instead, prolonged postponement of decisions on raising utility tariffs will lead to lower inflation, but will accumulate quasi-fiscal imbalances and worsen the financial condition of state-owned energy companies,” the report says.
This, according to the NBU, will increase the risks of instability in the energy market, worsen the investment potential of the industry, while price pressure will be postponed to the future.
Thus, it can be assumed that starting in 2026, tariffs will be gradually brought back to their economically justified levels.
Other key findings and forecasts of the NBU
By the end of 2024, inflation in Ukraine will accelerate to 9.7%, but next year it will decline to 6.9%, and in 2026 it will return to the NBU’s 5% target.
The economy is recovering faster than expected. This year, real GDP will increase by 4%. Over the next two years, economic growth will accelerate to 4.3%-4.6% per year.
Employment and wages will gradually increase due to a shortage of workers and stronger demand from employers.
Foreign aid will remain an important source of financing the budget deficit and replenishing international reserves.
The fiscal deficit will remain significant over the forecast horizon, although it will gradually narrow – from over 23% of GDP in 2024 to 12.4% of GDP in 2026 – due to the strengthening of the domestic resource base amid further economic growth.
