By KYIV. Dec 8 (Interfax-Ukraine) – The National Bank of Ukraine (NBU) admits the worsening of the macroeconomic outlook due to increased energy terror by the Russian Federation, head of the central bank Andriy Pyshny said.
"Compared to October, the risk of periodic mass attacks on energy infrastructure has increased. Several scenarios are now being considered … In all three options, we have common consequences: a decrease and deterioration in economic activity, higher inflation than was assumed in the October forecast," he said at a press briefing on Thursday.
According to Pyshny, the first scenario is based on the continuation of energy terror, but very successful protection of Ukrainian airspace and critical infrastructure. In this scenario, the electricity deficit should not exceed 25%. The NBU considers this scenario as basic, he added.
The second scenario, according to the head of the NBU, involves a slow recovery and deeper damage to the infrastructure. In this situation, the deficit is growing.
"This is what we could observe during the attack on November 25. In this situation, the deficit is growing. Both the cost of repair work and the unavailability of generating capacities are growing, as is the electricity shortage," the head of the NBU explained.
The third scenario, according to him, is large-scale interruptions in the power system.
"Here we need to believe that the air defense will not allow such a development of events, because they will also have quite significant, dramatic consequences and influence on economic processes," he stressed.
At the same time, Pyshny pointed out that, thanks to confidence in air defense, the NBU considers this option as the least likely.
"In all three options, we have similar consequences: a decrease and deterioration in economic activity, higher inflation than expected in the October forecast. This is what we have laid at the basis of our decision, which was announced today. We are seeing somewhat accelerated inflation, but they are lower than the NBU predicted in its October forecast," the head of the NBU explained.
According to him, the shortage of electricity will increase inflationary pressure by 1-2 percentage points in 2023.
"And this can happen depending on the scenario that will be applied," he said.
