Inflation is currently the main risk factor, after rising to 9.5% in May 2021, substantially above the target range (4% to 6%). While the National Bank of Ukraine (NBU) raised the key policy rate, further hikes to bring inflation under control may be necessary. In this regard, an independent NBU is essential.
A renewed reform drive would open the door for a further tranche under the current IMF programme, which has not seen any disbursements for the last 12 months. It would ensure both deficit financing and debt repayments as well as unlock further disbursements by the EU and the World Bank.