The National Bank expected that by the end of 2019 the inflation rate will be 6.3% and by the end of 2020 – 5%. As for GDP growth, at the end of 2019 GDP would be 2.5%, however, in 2020-2021 years to accelerate to 2.9% and 3.7%, respectively. About it reports a press-service of the NBU.
“In 2019-2020 consumer inflation will decline – to the top features of the target range of 5% ± 1 percentage point in early 2020 and the target level of 5% at the end of the year. The forecast of growth of prices in 2019 remains unchanged at 6.3% at the end of the year”, – stated in the message.
The main factors that will condition the growth of prices in 2019 will be the increase of administratively-regulated tariffs and wages increase production costs for businesses and stimulate consumer demand. However, at the forecast horizon preinflation the influence of these factors will gradually weaken.
Lower inflation will provide the tight monetary policy of the National Bank, which is necessary to return inflation to the target, and the restrained fiscal policy of the government for significant amounts of scheduled repayments of public debt. Also slower inflation will contribute to the low volatility of hryvnia exchange rate and moderate growth of prices of imported goods, including energy and food.
Remains unchanged as the forecast for real GDP growth. After acceleration in 2018 as earlier projected a slowdown to 2.5% in 2019. In 2020-2021 years growth again accelerated to 2.9% and 3.7%, respectively. This will contribute to a gradual easing of monetary policy that will stimulate domestic demand and revival of investment activity after the reduction of uncertainty about the political situation.
The national Bank improved the forecast of the international reserves. After the expansion in 2018 in the future, the current account deficit of Ukraine’s balance of payments is projected to be 3-4% of GDP. Continued cooperation with the IMF, a key assumption of the forecast against the background of maintaining tight monetary policy will maintain access to international capital markets in the forecast horizon as the private sector, and government. This will allow to Finance the current account deficit, and together with the receipt of official funding to keep international reserves at around 21 billion. USA.
Note that according to preliminary calculations of the National Bank, GDP growth in 2018 amounted to 3.4%, the highest figure for the last 7 years, and inflation for 2018 was 9.8%, which is the lowest figure for the last 5 years.