kyrylo shevchenko : national bank of ukraine press briefing monetary policy statement speech by mr kyrylo shevchenko, governor of the national bank of ukraine, at a press briefing on monetary policy, kyiv, 20 january 2022. * * * dear colleagues, i would like to inform you that the board of the national bank of ukraine has decided to raise its key policy rate to 10 % per annum. as many of the pro - inflationary risks have materialized, tighter monetary policy is needed in order to improve inflation expectations and ensure steady disinflation toward the target of 5 %. what price developments followed the last monetary policy meeting of the nbu board? at the end of the year, consumer inflation slowed from a peak of 11 % in september to 10 % in december. the factors behind the decline in inflation included : record - high harvests and a correction of some global food prices the strengthening of the hryvnia in the previous months the vanished low base effect and monetary policy tightening by the nbu and administrative decisions to fix tariffs on some utility services. on the other hand, a faster disinflation was prevented by a further increase in global energy prices, which passed through to prices of goods and services, and by pressures from other production costs, including labor costs. in particular, robust consumer demand also continued to play a role, which, among other things, pushed up core inflation to 7. 9 % as of the end of the year. how will prices behave going forward? the nbu has downgraded its 2022 inflation forecast, from 5 % to 7. 7 %, considering the materialization of said pro - inflationary factors. in particular, global energy prices will remain high for longer than expected. not only will it put pressure on businesses ’ production costs, but will also require at least a gradual revision of utility tariffs. price pressures from ukraine ’ s trading partner countries, in which inflation is only approaching its peak, will remain strong as well. second - round effects from businesses ’ larger raw material expenses and labor costs will also materialize further on. an increase in demand for ukrainian labor force, both inside the country and abroad, and qualification mismatches on the labor market will impact the growth in wages more than expected. with household income rising, consumer demand will remain robust, which will restrain disinflation. on the other hand, monetary policy tightening by the nbu, a correction of global commodity prices, the influence

a nation in the long run : infrastructure, education, or healthcare. for ukraine in the nearest future the answer is obvious – it is security. long - running full - scale war still remains the key risk to ukraine's economic development. this is an existential challenge for us, which requires the taking of firm decisions in order to survive, as well as international support. the war continues to pose significant 6 / 7 bis - central bankers'speeches risks to ukraine's economic development, and elevates uncertainty not just for our country, but for the whole world. international financial support is needed to deal with the humanitarian crisis, to rebuild infrastructure, and to restore and transform the ukrainian economy. the nbu, jointly with the government, continues to make every effort to reform ukraine's economy and financial system and to do everything in its power to contribute to ukraine's pursuit of european integration. we believe strongly that all the efforts outlined here will ensure the ukrainian economy continues to survive in wartime, and then recovers rapidly in peacetime. thank you very much! sources : vonyo, t. ( 2019 ). recovery and reconstruction : europe after wwii, commentary in the voxeu debate https : / / cepr. org / voxeu / columns / recovery - and - reconstruction - europeafter - wwii vonyo, t. ( 2008 ). post - war reconstruction and the golden age of economic growth. european review of economic history. vol. 12, no. 2, pp. 221 - 241 https : / / www. jstor. org / stable / 41378546 schonfelder, b. ( 2005 ). the impact of the war 1991 – 1995 on the croatian economy – a contribution to the analysis of war economies. freiberg working papers, no 14 https : / / www. econstor. eu / obitstream / 10419 / 22512 / 1 / schoenfelder _ 14 _ 2005. pdf eichengreen, b. ( 2010 ). lessons from the mashall plan. world bank world development report 2011. background case note. https : / / web. worldbank. org / archive / website01306 / web / pdf / wdr _ 2011 _ case _ study _ marshall _ plan _ 1. pdf novta, n. and e. pugacheva ( 2020 ). the macroeconomic costs of conflict. imf working paper series. wp / 20 / 110