The national Bank kept the inflation forecast at 12% in 2016 and 8% in 2017

Нацбанк сохранил прогноз инфляции на уровне 12% в 2016 году и 8% в 2017 году 

The national Bank of Ukraine maintains forecast consumer inflation at 12% at the end of 2016 and 8% by the end of 2017, despite the fact that in the first quarter decline in inflation was faster than forecast in January. Such inflation forecasts are consistent with the objectives of monetary policy of the National Bank, says inflation report national Bank of Ukraine in April 2016.

“The consistency of our forecast relates primarily to the fact that most of the factors that contributed to the rapid slowdown of inflation in January-March 2016, are short term in nature and their impact will be offset in the following periods. Also the return of inflation to the target values will be supported by rising prices on world commodity markets,” the report says.

According to the NBU, Ukraine’s economy will resume its growth in 2016 – real GDP in the first quarter will show a growth in annual terms, albeit marginally. In General, during the year, the national Bank considers it appropriate to keep the economic growth forecast at 1.1%. On the one hand, the expectations of the National Bank regarding the dynamics of prices on world commodity markets have improved. On the other hand, the favorable influence of this factor may be offset by deteriorating business expectations and investor sentiment in the event of a delay in the resumption of cooperation with the International monetary Fund.

These forecasts provided the baseline scenario, which is the most likely. It is based on the assumption that the situation in the East of the country will not deteriorate, cooperation with the IMF continues, prices on global commodity markets will continue to grow over the forecast horizon.

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The inflation report reflected the vision of the National Bank relating to the current and future state of Ukraine’s economy with emphasis on inflation development, is the basis for the decisions on monetary policy. The national Bank of Ukraine shall publish a quarterly report, beginning in April 2015.

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