18:06 26.08.2020

Economy ministry improves inflation forecast for 2020 to 5.9%, expects average hryvnia exchange rate at UAH 27/$1

2 min read
Economy ministry improves inflation forecast for 2020 to 5.9%, expects average hryvnia exchange rate at UAH 27/$1

The Ministry of Economic Development, Trade and Agriculture of Ukraine improved the inflation forecast for 2020 to 5.9% December over December, while in the macroeconomic forecast approved in March, this indicator was at the level of 11.6%, according to the forecast of the socio-economic development of Ukraine for 2021-2023.

According to the document, this year the ministry predicts an average annual rate of UAH 27/$1 (previously UAH 29.50/$1 was expected), and at the end of the year – UAH 28.3 / $.

"However, the strengthening of the role of the expenditure component, which is expected for various reasons (including through an increase in the minimum wage and attempts to compensate for the losses incurred), in the formation of prices for manufacturers of industrial products at the end of 2020 and, especially in 2021, will have a stimulating effect on inflationary processes," the ministry said in the forecast.

Following the results of this year, the Ministry of Economy expects a trade deficit of $5.4 billion (previously this figure was estimated at $8.3 billion).

The forecast for nominal GDP has been reduced from UAH 3.985 trillion to UAH 3.975 trillion, although the ministry still expects GDP to fall by 4.8%.

At the same time, the Ministry of Economy expects an increase in tariffs for railway transportation by 17% this year, as well as by 22% and 26% in the next two years (+ -3%).

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