Inflation in Ukraine

A short history of inflation in Ukraine

War and Currency Collapse (2014 to 2015)

Ukrainian inflation reached 60.9% in the year to April 2015. The cause was war. Russia annexed Crimea in March 2014 and fighting began in the Donbas, which cost Ukraine a large part of its industrial base and its export earnings at once. The hryvnia, which had been held at a fixed rate, was floated in February 2014 and lost roughly two thirds of its value against the dollar; for an economy importing most of its energy, that passed through to prices quickly.

Stabilisation (2016 onwards)

Inflation was back under 7% by mid-2016, brought down by very high interest rates and an International Monetary Fund programme. The National Bank of Ukraine adopted a formal inflation target in 2016, having spent the previous two decades managing the exchange rate instead.

The Full-Scale Invasion (2022 onwards)

Inflation reached 26.6% in the year to December 2022. Russia invaded on 24 February 2022, and what Ukraine paid was not the higher world commodity prices the invasion imposed on everyone else but the fighting itself: occupied and shelled territory stopped producing, the Black Sea ports were blockaded so grain could not be sold abroad, and millions of people left their jobs or the country. Tax revenue collapsed while military spending rose, and the National Bank covered the gap by printing money to buy government bonds. The hryvnia had been fixed at 29.25 to the dollar on the day of the invasion; it was devalued by a quarter to 36.57 in July 2022, and the benchmark interest rate went from 10% to 25% that June.

Inflation fell to 3.2% by April 2024. Allied grants and loans had replaced the money printing, the grain corridor reopened the export route, and the exchange rate held. It rose again to 15.9% in May 2025, this time because strikes on power generation raised the cost of running anything and a poor harvest raised the cost of food.