NBU worsens inflation forecast for 2018 to 8.9%

The National Bank of Ukraine (NBU) has worsened the inflation forecast for 2018 to 8.9% from 7.3%, according to the central bank's website.

"The National Bank predicts that in 2018 inflation will remain high: 8.9% total inflation and 8.2% underlying inflation," the report said.

According to the National Bank, inflationary pressure will be due to a number of factors. Among them is the transfer of growth in prices of raw products, which was observed in 2017 (primarily for meat and milk) to the prices of products with a high degree of processing, growth of public income and, accordingly, a higher consumer demand against the background of higher social standards and wages in the private sector, the increased external vulnerability of the Ukrainian economy due to delays in cooperation with the International Monetary Fund (IMF).

The National Bank also notes high inflationary expectations of the population and businesses caused by the current growth rates of consumer prices and volatility in the currency market in recent months, as well as the rapid growth of world oil prices, which leads to higher fuel prices in the domestic market.

At the same time, the NBU notes that consumer inflation in 2018-2020 will be gradually declining and will reach the target level in mid-2019.