at the same time, the impact of the pandemic turned out more persistent and strong. coupled with the consequences of the surge in natural gas prices, this led to a weaker performance of the ukrainian economy in h1. therefore, the nbu has downgraded its economic growth forecast for 2021, from 3. 8 % to 3. 1 %. unfavorable conditions on the energy market and the impact of global logistic problems will limit ukraine ’ s industrial output, thus curbing economic recovery next year. to this end, the nbu has 1 / 3 bis central bankers'speeches revised downward its gdp growth forecast for 2022, from 4 % to 3. 8 %. gdp is expected to grow by 4 % in 2023. over the forecast horizon, economic growth in ukraine will be driven by : continued global economic recovery an increase in domestic demand, including investment demand the terms of trade remaining favorable for ukrainian exporters the progress in vaccinations, which will prevent the imposition of lockdowns or other restrictions on economic activity. in 2021, the current account deficit will hit about 1 % of gdp on the back of a bumper harvest and high export prices. in the coming years, the deficit will gradually widen to 3 % to 4 % of gdp. the deficit will be driven by some worsening in the terms of trade and more robust consumer and investment demand resulting from economic recovery. under what conditions would this forecast be realized? the primary assumption of the nbu board is that ukraine will continue to cooperate with the imf. ukraine reached staff level agreement with the imf. this has opened the way for the first revision of the stand - by arrangement ( sba ) by the imf executive board, and for consideration of the request for the program to be continued. the implementation of the existing stand - by arrangement will ensure the receipt of required official financing in 2021 – 2022, provide better terms of external borrowing, while also supporting foreign investors ’ interest in hryvnia assets. cooperation with the imf will help speed up economic growth, stabilize inflation at its target level, and maintain international reserves at usd 30 to usd 31 billion in the coming years. the key risks to the economy are the imposition of stricter quarantine measures in ukraine and globally, and a longer and more pronounced than expected surge in global inflation. higher morbidity due to the low vaccination coverage in ukraine could lead to a stricter lockdown and

tackling inflation during a pandemic speech delivered to the waikato university nz economics forum adrian orr, governor 25 february 2022 i would like to acknowledge with thanks principal author mac mckenna and the wider economics and research departments, and other reviewers and contributors from te putea matua ref # x303207 v1. 17 introduction tena koutou, tena koutou, tena koutou katoa. central banks around the world are currently being confronted by a challenge we have not experienced for some time : high and sustained inflationary pressure. while the inflationary challenge is a familiar one, the environment within which we are tackling it is unique and uncertain. in this speech i will touch on the context for the monetary policy committee ’ s decision this week, and the key monetary policy challenges facing the reserve bank of new zealand – te putea matua – ahead. monetary policy during a pandemic the covid - 19 pandemic presented a unique setting for many central banks globally. we must meet our low and stable inflation mandates in the context of a large and evolving health shock to the global economy. in early 2020 there were a number of unique factors that confronted economic policy makers globally. the economic outlook – and hence optimal policy responses – became dependent on the scale and severity of the covid - 19 virus. this scale and severity in turn depended on : how individuals, households, governments and central banks would react to the pandemic environment ; the pace at which a vaccine would be developed and its effectiveness ; the speed at which a vaccine could be rolled out internationally ; and how the virus would evolve over time. epidemiologists struggled to model and predict the path of the virus. but this path, and the predictions of epidemiologists, have played a considerable role in how governments and central banks have developed the appropriate economic policy responses. from the outset of this health shock, the reserve bank ’ s monetary policy committee was convinced that a search for economic certainty was near - futile. instead, we needed to provide as much monetary policy certainty as possible within an uncertain economic environment. this is why we adopted a ‘ least regrets ’ framework for deciding on our actions, and continue to do so today. 1 by this, i mean ensuring our decisions avoid the worst policy mistakes while maximising our ability to meet our objectives over the medium term. in early - 2020 the risks to the global economic outlook were heavily skewed in a downward direction