Inflation in Ukraine by the end of 2022 may exceed 20% due to the consequences of a full-scale war, but it will be controlled, the National Bank of Ukraine said on Thursday.

According to the report, the increase in the price of goods and services will be due, in particular, to disruption of production processes, logistical problems due to the temporary occupation of part of the territories, the destruction of transport infrastructure and, as a result, an unevenly distributed supply across individual regions.

In addition, the inflation growth will be affected by the pass-through effects of the devaluation of the hryvnia exchange rate that occurred on the eve of the war and the high cost of energy in the world, which will put pressure on the cost of fuel, goods and services with a significant share of energy in the cost.

At the same time, price growth will be restrained by measures taken by the National Bank and the government of Ukraine, including temporary fixing the hryvnia exchange rate, which curbs the likely worsening of expectations and an increase in the price of imported goods, tax cuts, including indirect taxation of imports, price fixing for housing and communal services, and administrative regulation of prices for a number of foodstuffs and fuels.

The oversupply of certain agricultural crops due to limited export opportunities will have an additional constraint.

It is indicated that after the resumption of the functioning of monetary transmission channels, the National Bank will again apply the refinancing rate and other monetary instruments to keep inflation expectations under control and gradually reduce inflation.