The National Bank of Ukraine (NBU) has revised its inflation forecast from 7% to 8% in 2021, expecting inflation to return to the 5% target in H1 2022.
“Considering the fast-paced recovery of the global economy and higherinflationary pressures, the NBU revised its inflation forecast from 7% to 8% in 2021, expecting inflation to return to the 5% target in H1 2022 and settle at this level further on,” the NBU said on its website on Thursday.
The central bank said that inflation will peak in Q3 2021. Inflation will start to decelerate in autumn, return to the 5% ± 1 pp target range in H1 2022, and subsequently remain there.
The steep rise in inflation was largely driven by temporary factors, such as growing global prices for food and energy. A revival in the global economy and the effects of smaller harvests continued to push up prices. A low comparison base also played an important role.
Underlyinginflationary pressures increased due to sustained growth in consumer demand, which was, among other things, fueled by higher wages, the NBU said.
Retail turnovers consistently exceeded pre-crisis levels, being 5.6% year-over-year larger in February, the central bank said.
