NBU keeps inflation forecast for 2021 at 9.6%
The National Bank of Ukraine (NBU) has maintained its 2021 inflation forecast at 9.6% and expects it to return to 5% by the end of 2022.
"The NBU has maintained its 2021 inflation forecast at 9.6%... Inflation will decline thanks to waning low base effects, FX markets remaining favorable, and this year’s large harvests… The above factors will make inflation slow to 5% at the end of 2022 and remain close to the target further on," the National Bank reported on its website on Thursday.
The monetary policy tightening actions taken earlier by the NBU – the optimization of the monetary policy design, a complete phaseout of anti-crisis monetary measures, and raising the key policy rate – will also curb growth in consumer prices, the NBU said.
The NBU estimates the growth in consumer prices will peak in September–October this year, and afterwards, the inflation trend will reverse.
The regulator said that a faster disinflation will be impeded by energy prices remaining high longer and by sustained consumer demand.
"Moreover, considering the prolonged effects of these pro-inflationary factors, the NBU will have to tighten the monetary conditions in 2022–2023 more than envisaged in the July forecast in order to bring inflation to the target of 5%," the NBU added.