Following the decision to print more money, Ukraine could see price levels climbing by a substantial margin, potentially tens of percent. This assessment comes from Tatiana Kulikova, an economist who spoke to socialbites.ca. Earlier, Yaroslav Zheleznyak, a deputy in the Verkhovna Rada, noted that the National Bank of Ukraine added around 30 billion hryvnia to the money supply in the week of August 16–23 to bridge the budget gap.
“Ukraine resembles many governments under strain that end up funding deficits through the central bank. In the 20th century, powers such as the United States and the United Kingdom employed similar measures during wartime, and Germany did so during the First World War as well. The outcome observed globally has been a rise in inflation, often by double-digit percentages, based on historical experience,” the economist explained.
She pointed to historical episodes where inflation proved stubborn, notably the example of Weimar Germany. “During the war, the currency was issued on a massive scale. Prices jumped by many tens of percent, and even after the conflict, the country faced the need to issue more money to service debts. In the ensuing years, the old currency unit effectively lost value, replaced by a new one at astronomically high levels,” she observed.
According to Kulikova, it remains uncertain whether Ukraine’s inflation will spiral out of control or stay within a high but manageable range. “There is a sizable foreign currency debt, but creditors have granted deferrals. If repayments are pushed into the near future, the scenario similar to Weimar could unfold. If not, inflation may stay high but within more contained bounds,” she noted.
City and national authorities have reported a weekly budget shortfall on the order of several billion dollars. With traditional tax revenues and customs receipts underperforming, the National Bank of Ukraine has been actively supplying hryvnia to cover ongoing expenses. Zheleznyak highlighted that the sale of local government bonds yielded limited returns, and foreign assistance during the period amounted to just over 315 million dollars, providing only a partial cushion for the deficit.
Experts emphasize that such dynamics depend on multiple moving parts: exchange rate shifts, the pace of external funding, and the tempo of domestic demand. When a country relies heavily on monetary expansion to bridge deficits, inflation tends to follow unless offset by an equally rapid increase in productivity or a parallel improvement in external financing terms. This delicate balance is especially critical for economies like Ukraine, where external pressure, reserve adequacy, and the structure of public debt interact in intricate ways. In any case, observers caution that the inflation path is not predetermined and can be influenced by policy choices, market expectations, and the evolution of global commodity prices.
In practice, the near-term inflation trajectory often hinges on policy signals. If the central bank coordinates closely with fiscal authorities to restore credibility and anchor expectations, disinflation could begin to take hold even amid structural weaknesses. Conversely, persistent deficits and continued monetization of debt may sustain higher inflation for an extended period. The interplay between debt sustainability, foreign aid flows, and investor confidence remains central to shaping the outlook for Ukraine’s price level in the months ahead, according to economists tracking the situation for the region.
Analysts remind readers that while history offers cautionary tales, it does not dictate fate. The current Ukrainian context involves unique mix of wartime finance, international assistance, and domestic reform efforts. Decision-makers face a challenging task: ensure the budget remains funded without letting inflation undermine purchasing power. The outcome will likely depend on timely policy adjustments, credible communication to households and markets, and the ability to secure durable external financing that reduces the need for abrupt monetary expansion. In short, inflation risks exist, but a combination of prudent policy moves and external support could help keep price growth within a more tolerable range as the country pursues stabilization and recovery.