war's impact, including extensive damage to the energy system economic growth continued in h1 2024, but has decelerated in recent months, impeded by russia's attacks on energy infrastructure. however, businesses have partially 1 / 3 bis - central bankers'speeches adapted to rolling blackouts. the stable operation of the sea corridor has also provided significant support for economic activity. despite power shortages and smaller harvests compared to a year ago, the nbu has even slightly upgraded its economic growth forecast for this year, to 3. 7 %. this was made possible by better q1 results and an anticipated expansion of fiscal stimulus, as well as by the development of distributed generation with support from large - scale lending programs. the step - by - step normalization of economic activity and the steady pursuit of loose fiscal policy, combined with the development of export routes and the revival of external demand, will help speed up real gdp growth to 4 % – 5 % in 2025 – 2026. significant international financial aid will enable the government to finance the budget deficit, and the nbu to maintain a comfortable level of reserves under the forecast's baseline scenario, ukraine will keep receiving substantial external financing inflows. however, they will slowly decline with the growth in the internal capacity to use domestic resources to finance budget expenditures. international partners are expected to provide about usd 38 billion in soft loans and grants to ukraine this year, and no less than usd 31 billion next year. such volumes of external inflows, coupled with growing domestic borrowing, will make it possible to cover a significant budget deficit of about 23 % of gdp in 2024 and 18 % in 2025. for its part, the nbu will be able to maintain a sufficient volume of international reserves to ensure the sustainability of the fx market and moderate inflation. the course of the war continues to be the key risk to inflation dynamics and economic development the duration and nature of russia's aggression will continue to have a notable impact on ukraine's inflation and economic development. a prolonged high - intensity war will curb the economy's return to normal conditions and make it difficult to bring inflation to the nbu's target. there are other risks, most of which are also directly or indirectly related to the war, including : the emergence of additional budget needs, mainly those to maintain defense capabilities the pass - through to prices of certain new business taxes, the introduction of which is currently being discussed at the state level further damage to infrastructure

20th march last year. at first, the outflows were met by running down their holdings of cash, but as the outflows increased, they sought to liquidate some 2 / 6 bis central bankers'speeches of their bank assets – cds and cp. but they found that the market for those assets – which typically comes primarily from dealers buying back their own paper – was closed. the dash for cash meant that the tide was flowing fast against them. as the regulatory system currently works, if mmfs ’ liquid asset ratios fall towards prescribed thresholds, and they are unable to top up their liquid assets ( cash ) through sales, they are able to ‘ gate ’ or impose fees on investors, in other words decline to provide immediate liquidity. as with banks, the broader danger of this situation – which is a threat to financial stability – is that such a problem in one fund could trigger contagion to other funds, through fear that they might have the same problem, and thus lead to a highly destabilising run on money market funds. these thresholds can, therefore, also affect the behaviour of fund managers, making liquidity buffers not usable in times of stress, for fear this would fuel investors ’ desire to run. it is also important to note that another consequence of the rising demand for cash, and the failure to meet that demand by selling assets, was a sharp rise in money market rates. the rise was sharpest at longer money market - tenors, but there was also a pickup in overnight repo rates. this was a particularly serious sign of market dysfunction in what are core markets, and a serious challenge to our ability to implement monetary policy by keeping these rates broadly aligned to the official bank rate. it resulted in an increase in the cost and reduction in the availability of credit – to the financial system, other companies and households – precisely at the time they needed it most. there was therefore a serious threat to both monetary policy and financial stability, in other words both of the core purposes of a central bank. it was an existential moment. we took two actions which eased the pressure, and did so quickly. first, on 19th march the mpc decided to buy gilts in large size and at high speed. at its peak the pace of gilt purchases reached £13. 5bn per week, more than twice as fast as in early 2009. the use of this broad monetary policy tool was warranted given the widespread nature of the dash