( mainly aluminium ) and food products and thus has both gained and suffered from rising raw material and food prices. terms of trade have remained favourable, although they have declined from their recent peak. despite access to abundant domestic renewable energy, imported fossil fuels impact the icelandic value chain both through the price of imported fuels, various imported goods and generally the cost of transportation, which is high given iceland ’ s remoteness from major markets. fuel is also an important cost item in fisheries. rising import prices, however, result not only from the war in ukraine, but can be partly explained by supply - chain disruptions and the container cost crisis triggered by a reallocation of resources in the global economy as it recovered from the pandemic. the cost increases seep into the global value chain and affect inflation globally. eventually those mismatches are being resolved from the supply side, as firms respond to price signals, and from the demand side, with global tightening of monetary conditions and the withdrawal of fiscal stimulus. mismatches are being resolved by increased supply and global tightening the post - pandemic recovery in iceland has two distinguishing features that set it apart from the recovery in most other oecd economies. firstly, the expansion of the tourism sector and the associated construction boom have relied quite strongly on imported labour. because of net migration the average rate of population growth since 2016 has been 2 %, far higher than in other advanced countries. the rate of population growth has also been quite variable. to some extent, cyclical expansion has been facilitated by variability in the net migration rate rather than the domestic unemployment rate. population growth fell into negative territory following the gfc, but has twice peaked at 3 % during periods of tourism sector expansion, before and after the pandemic. recovery of tourism causes net migration to rise while the variability of net migration can be a useful shock absorber, helping to keep unemployment low and relatively stable during downturns and make the labour market less overheated during expansions, variable population growth creates problems in the housing market. the most recent surge in net migration has amplified the impact of covid - related expenditure switching on housing prices. the demand for housing fluctuates in line with migration ; however, the character - istically inelastic supply of housing may become even more inflexible if volatile migration makes future housing demand more uncertain. as a result, what is gained in terms of a more flexible labour market may be lost due to a more

andriy pyshnyy : national bank of ukraine press briefing - monetary policy decisions speech by mr andriy pyshnyy, governor of the national bank of ukraine, at a press briefing on monetary policy decisions, kyiv, 26 october 2023. * * * today the board of the national bank of ukraine has taken a decision to set its key policy rate at 16 % effective 27 october 2023, making it equal to the rate on overnight certificates of deposit ( cds ). in such a way, the nbu is modernizing the operational design of its monetary policy in line with the lower - bound system. interest rates on the nbu's other transactions with the banks have been set as follows : the key policy rate + 4 pp ( 20 % ) for three - month cds and the key policy rate + 6 pp ( 22 % ) for refinancing loans. the rates on the nbu's transactions with the banks will thus actually remain unchanged. the modernization of monetary policy operational design will reinforce the signaling role of the key policy rate amid the structural liquidity surplus. in particular, such changes will enable the nbu to maintain short - term hryvnia interbank rates close to the key policy rate. as a result, the nbu will have more power to influence expectations of economic agents and motives of their economic behavior. at this point in time, keeping rates on the nbu's transactions with the banks unchanged conforms with the need to maintain the attractiveness of hryvnia instruments, which is important for ensuring moderate inflation and exchange rate sustainability over the forecast horizon. inflation has been decreasing rapidly over past months, primarily on the back of strong harvests of agricultural crops in september, inflation declined to 7. 1 % yoy. such price dynamics were driven by large supply of agricultural produce of the new harvest and the moratorium on raising some utility tariffs. stable fx market conditions limited the rise in prices for goods with a significant import component. as a result, core inflation also slowed considerably in september, to 8. 4 % yoy. according to the nbu's estimates, inflation continued to decelerate in october. among other things, this was driven by the maintained exchange rate sustainability against the backdrop of the successful transition to managed exchange rate flexibility. at the same time, other underlying factors continued to put pressure on the inflation rate. the gradual economic recovery is being accompanied by a revival of demand for consumer goods