Higher oil prices caused by the US-Israeli war on Iran could raise inflation rates in Ukraine by 1.5 to 2.8 percentage points, Ukraine's top central banker said on Monday. National Bank of Ukraine Governor Andriy Pyshnyi said the central bank would stick to its target of lowering inflation to 5 percent in three years, using all available tools to ensure that goal was met. "We're trying to walk on a razorblade," Pyshnyi said through a translator, noting prices have already started to rise.

When asked if the war would lead the bank to amend its economic forecasts, Pyshnyi said the bank has planned meetings for next week that will assess the full effect on Ukraine's economy. The secondary effects of the war, including on fertilizer prices, would also be "quite significant." Pyshnyi is part of a large Ukrainian delegation attending the spring meetings of the IMF and the World Bank in hopes of ensuring that Russia's war on Ukraine, now in its fifth year, remains on the agenda, despite the outbreak of a new war in the Middle East.

He welcomed the election results in Hungary, which saw President Viktor Orban swept from office, and said he hoped it would resolve delays in the European Union's 90 billion euro ($105.77 billion) loan to Ukraine. Orban, Hungary's longtime nationalist leader whose party lost Sunday's national election to the upstart centre-right Tisza party, had blocked implementation of the EU loan for Kyiv, citing a dispute over a war-damaged pipeline. Pyshnyi said he would meet with US Treasury Secretary Scott Bessent and other top US officials on Wednesday, US lawmakers on Thursday and Federal Reserve Chair Jerome Powell on Friday.

Meanwhile, massive Russian strikes on Ukraine's energy infrastructure are expected to depress growth and increase migration outflows, he said. While the government expects the flow of migration to turn positive once fighting stops, Pyshnyi said an extended conflict could complicate the return of some of the estimated 6 million Ukrainians who remain abroad. "The longer it lasts, the higher the risk of Ukrainians abroad to be assimilated," he said.