The National Bank of Ukraine (NBU) still forecasts inflation will slow down to 9.1% in 2017, further to 6% in 2018 and 5% in 2019, NBU Governor Valeria Gontareva has said in a press conference in Kyiv on Thursday.

"The National Bank forecasts that inflation in 2017-2019 will be within the announced benchmarks (8% ± 2 p.p. in 2017, 6% ± 2 p.p. in 2018 and 5% ± 1 p.p. in 2019)," the NBU said in a press release on Thursday.

Throughout Q2 and Q3 of 2017 inflation in annual terms is projected to remain in the double-digit range and volatile, Gontareva said. It is attributed to the base effects, namely the administered price dynamics in 2016. Inflation will only return to a one-digit range in Q4 2017.

No significant deviations of core inflation from the current level – 6.5% – are projected by the end of the year. Recovery of consumer demand and second-round effects from the higher food price inflation will be the inflation driving factors.

Prices of unprocessed foods will rise at a faster pace in the following months driven by a number of factors. First, global food prices are projected to move on an upward trajectory. Second, opening of the new markets will result in a lower supply of certain types of domestically produced foods in Ukraine.

In addition to supply factors, there is also an effect of demand factors. Consumer demand is expected to recover gradually due to a fast-growing nominal household income.

"The blockade of freight traffic across the line of contact in the eastern Ukraine will have no significant impact on the headline inflation," the Central Bank said.