and services. the shortage of skilled workers, particularly due to migration, is prompting companies to raise wages relatively quickly. moreover, the pressure on business costs remains high due to the consequences of the war. 1 / 4 bis - central bankers'speeches inflation will remain below 10 %, albeit rising temporarily next year the nbu has improved its end - 2023 inflation forecast, from 10. 6 % to 5. 8 %. this was mainly driven by the impact of the large harvest on food price dynamics. at the same time, the nbu has revised its 2024 inflation forecast upward, from 8. 5 % to 9. 8 %. the accelerated growth in prices will be caused by this year's low base for food prices, persisting pressures on business costs due to revised security risk assumptions, higher wages, and faster increases in administered prices. going forward, inflation will decelerate to 6 % in 2025. this will be primarily driven by the expected decline in security risks assumed by the nbu's forecast. the recovery in optimal logistics and production in the post - war period will enable an increase in supply of goods and limit price pressures. the expected decline in global energy prices will also have a major impact on price movements. economic growth will resume as of the end of 2023 and will continue further on the nbu improved its real gdp growth forecast from 2. 9 to 4. 9 % in 2023. the faster pace of economic recovery is driven by a number of factors. they include improved adaptability of businesses and households to wartime conditions, better estimates of harvests, more alternative routes of export supplies, and larger budgetary spending. in 2024, the economy will grow by 3. 6 % despite persistently high security risks. the economic recovery will be supported by continued development of alternative supply routes and sustained loose fiscal policy, which will support consumer demand. on the other hand, still complicated logistics and investment being limited by the war will be a drag on economic growth. the nbu forecasts that real gdp growth will accelerate to 6 % in 2025. this will be primarily driven by the expected decline in security risks. as these risks subside, migrants will gradually return from abroad, consumer and investment confidence will improve, optimal supply and production chains will be restored, and damaged infrastructure will be reconstructed. thanks to official financing, the nbu will be able to maintain a sufficient level of international reserves and therefore the sustainability of the fx market one of the assumptions

change the interest rates for the nbu's transactions with the banks the previous steps to loosen the interest rate policy led to anticipated decreases in rates on hryvnia instruments. at the same time, current rates on hryvnia domestic government debt securities and deposits are sufficiently protecting the hryvnia from inflation - driven erosion of purchasing power. on the other hand, the potential for easing the interest rate policy is currently limited, given the need to keep real interest rates on hryvnia instruments in positive territory. 3 / 4 bis - central bankers'speeches in addition, to stimulate the further improvement of the term structure of bank deposits, the nbu has decided to adjust the parameters of the banks'investments in three - month certificates of deposit. specifically, from december 2023 forward, the only basis for calculating the cap on the banks'investments in three - month cds will be the increase in hryvnia retail term deposits with maturities of more than three months. this will induce the banks to actively work with depositors to ramp up term deposits. the ongoing interest rate policy easing will be balanced against the need to maintain the attractiveness of hryvnia assets. provided there are no signs that the balance of risks is deteriorating, and provided that market participants have successfully adapted to the new fx regime, the nbu sees the possibility of cutting the key policy rate further at its upcoming meeting. that said, the expected trajectory of inflation and planned steps to liberalize the fx market some more limit the room for easing interest rate policy next year. the nbu will only be able to return to the key policy rate easing cycle in 2024 if risks to exchange rate sustainability and inflation decline substantially. thank you for your attention! 4 / 4 bis - central bankers'speeches