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Annual headline CPI slowed to 7.4% in January from 8.0% in December. Disinflation was visible across the majority of consumer basket categories with the steepest deceleration seen for communication services (7.1% YoY vs. 12.0% in December) and health services (4.7% vs. 6.0%).
Gross international reserves of the NBU were up 0.6% in January to US$57.7bn, an equivalent of 6.0 months of future imports as per NBU estimates.
The economy is set to slow further as headwinds remain intense. The energy crisis caused by russia’s terror attacks on civil infrastructure is interrupting production cycles in many sectors and damaging consumer sentiment. If safety risks don’t subside dramatically in 2026 – which is our conservative baseline assumption – the economy will struggle to grow. Nonetheless, the continued inflows of foreign financial aid imply the economy will remain on a footing that is sufficiently strong and risks to a broad macroeconomic stability are reasonably low. The EU decision to grant a EUR90bn loan t...
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