The National Bank of Ukraine (NBU) forecasts that for most of 2020 inflation will be below the target range of 5% ± 1 p.p., but will return to its borders at the end of the year.
The NBU has said this in a statement, Ukrainian News Agency reports.
"The slowdown in inflation, according to the NBU estimates, continues. Starting in January and for most of the year, it will be below the target range of 5% ± 1 p.p. However, it will accelerate in the fourth quarter and will reach 4.8% by the end of 2020," the statement reads.
A number of factors will contribute to this.
Firstly, last year’s hryvnia revaluation will continue to be reflected in the value of imported goods and goods with a high share of imports in cost.
Secondly, the preservation of relatively low energy prices in world markets will restrain the rise in price of fuel in the domestic market.
Thirdly, food inflation in the absence of supply shocks will be insignificant due to the expected improvement in the yield of vegetables and fruits.
At the same time, administratively regulated prices will grow somewhat higher than last year, primarily through further bringing excises on alcohol and tobacco products to the European levels.
In 2021-2022, inflation due to easing monetary policy will be at the level of the medium-term goal of 5% ± 1 p.p.
As Ukrainian News Agency earlier reported, the NBU retained its forecast of GDP growth at 3.5% in 2020.
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