No need to revise stress tests for Ukrainian banks despite worsened macro forecast – National Bank official

The downward revision of Ukraine's macroeconomic forecast in the NBU's July Inflation Report, linked to the protracted war and heightened security risks, is not significant enough to warrant changes to the parameters of the stress tests currently underway, First Deputy Governor of the NBU Serhiy Nikolaychuk told Interfax-Ukraine.

"The changes to our macro forecast were not dramatic enough to revise the stress test parameters we are currently using. Therefore, the results will remain relevant under the assumptions set earlier this year for both the baseline and adverse scenarios," he said.

According to Nikolaychuk, shifts in macroeconomic indicators may affect credit demand, but banks are capable of adjusting their offerings and procedures to new conditions.

"With regard to capital buffers – we will be guided by the results of the stress test. Our plans in this regard remain unchanged," he added.

In July, the NBU updated its macroeconomic forecast. The baseline scenario now assumes a slower normalization of business activity, with GDP growth in 2026 expected at just 2.3%, down from the 3.7% projected in April's Inflation Report. The inflation forecast for next year was raised from 5% to 6.6%.

"At the same time, if conditions normalize quickly, private investment and consumption will grow substantially, offsetting the impact of rapid fiscal consolidation, and GDP growth could reach 3–3.5%," the central bank said in outlining its alternative scenario.

In addition, the NBU downgraded its 2025 GDP growth forecast to 2.1% from 3.1%, while raising its inflation projection from 8.7% to 9.7%.

The NBU announced in November 2024 that in 2025, for the first time since Russia's full-scale invasion, it would return to a full three-stage assessment of the banking system's resilience, one of which is stress-testing the largest banks under baseline and adverse scenarios using financial statements with a three-year forecast horizon.

In May, the NBU approved macroeconomic scenarios for the stress tests: the baseline assumes GDP growth this year of 3.1% with a 5.6% depreciation of the hryvnia against the dollar, while the adverse scenario assumes a 3.1% GDP contraction and an 11.9% hryvnia depreciation.

Under the adverse macroeconomic scenario, Ukraine's real GDP could decline by another 2.2% next year, with a return to 3.3% growth projected for 2027.

The NBU also projects inflation in the adverse case at 17.9% this year, 12.5% next year, and 6% in 2027, with the key policy rate averaging 15.8%, 14.7%, and 14.2% respectively. Currently, the rate is held at 15.5% per annum.