The impact of a possible increase in payments to military personnel on inflation will depend on the sources of funding, according to the National Bank of Ukraine (NBU).
“If this falls within the current budget deficit through the reallocation of expenditures among various budget items, then the impact on inflation will be negligible. If an additional increase in the deficit is anticipated, the impact will be more noticeable,” Deputy Governor of the National Bank Volodymyr Lepushynsky said at a briefing on Thursday.
According to him, the issue of funding sources for such an increase in payments falls within the government’s purview, and the central bank currently has no relevant information.
NBU Governor Andriy Pyshny added that the regulator hopes to receive more information in the near future about possible additional expenditures and the sources to cover them, in order to factor these considerations into the July macroeconomic forecast.
“If we’re talking about a rise in the budget deficit and the corresponding impacts, we will, of course, take these things into account,” he said.
As previously reported, President Volodymyr Zelenskyy announced the first phase of military reform, which calls for increasing the base pay for military personnel in rear-echelon positions to at least UAH 30,000, and for infantrymen on the front lines-to an average of UAH 300,000 through enhanced contracts.