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RESEARCH CENTER FOR INDUSTRIAL DEVELOPMENT PROBLEMS of NAS of Ukraine (KHARKIV, UKRAINE)

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ID R30-03156

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Liburkina L. M.

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Energy Shocks, Inflation, and Economic Growth in Ukraine: External Price and Domestic Infrastructure Channels
Bondarenko I. P.

Bondarenko, Ievgen P. (2026) “Energy Shocks, Inflation, and Economic Growth in Ukraine: External Price and Domestic Infrastructure Channels.” Business Inform 9:233–240.
https://doi.org/10.32983/2222-4459-2026-9-233-240

Section: Economic and Mathematical Modeling

Article is written in Ukrainian
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UDC 338.12:620.9:330.101.54(477)

Abstract:
Aim of the article – the study distinguishes the external price channel from the domestic infrastructure channel through which energy shocks affect inflation and economic activity in Ukraine and estimates the distributed pass-through of external energy pressure to consumer prices. The empirical base covers monthly observations from January 2015 to December 2025 and annual indicators for 2016–2025. A geometric external energy pressure index with 2015 = 100 is constructed from Brent crude oil and European natural gas prices. Inflation and hryvnia depreciation are calculated from official monthly series of the National Bank of Ukraine. Pass-through is estimated using an autoregressive model of monthly log inflation that includes the current change in the energy index, grouped lags of one to three and four to six months, exchange-rate depreciation, wartime, infrastructure-attack indicators, and calendar effects. Newey – West standard errors with 12 lags, unit-root tests, a joint Wald test, and residual diagnostics are applied. The sum of the current and lagged energy coefficients equals 0.0334 and is jointly statistically significant (Wald ?2 = 9.69; p = 0.0019). A one-off 10% increase in the index is associated with an accumulated direct increase in monthly inflation of approximately 0.33 percentage points over seven months; including autoregressive propagation, the conditional dynamic effect is about 0.63 percentage points. The attack-wave indicator is positive but statistically imprecise, so the direct inflationary effect of infrastructure damage is not identified in this specification. Annual data show that the relationship between global energy prices and growth is unstable: Ukraine’s economic slowdown in 2025 occurred despite a lower external energy index, while capacity shortages and security-related losses persisted. The study develops a two-channel analytical framework and a transparent composite index and estimates pass-through over the complete 2015–2025 sample without the mechanical serial correlation inherent in year-on-year inflation at monthly frequency. Monetary policy should contain second-round effects and destabilization of expectations, whereas the primary infrastructure shock requires generation recovery, network resilience, storage, demand management, and targeted social protection.

Keywords: energy shock; energy-price pass-through; cost-push inflation; economic growth; natural gas prices; oil prices; energy infrastructure; Ukraine.

Fig.: 1. Tabl.: 2. Formulae: 2. Bibl.: 18.

Bondarenko Ievgen P. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, S. I. Yuriy Department of Finance, West Ukrainian National University (11 Lvivska Str., Ternopil, 46009, Ukraine)
Email: [email protected]

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