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.
The growth of consumer prices in Ukraine in March 2021 accelerated year-over-year to 8.5% from 7.5% in February, from 6.1% in January and from 5% in December 2020.
According to the State Statistics Service on Friday, in March inflation increased to 1.7%, while in February it was 1%, in January 1.3%.
In addition, the State Statistics Service in March 2021 recorded underlying inflation of 1.6% compared to the previous month and 2.4% from the beginning of the year.
The Ukrainian government expects inflation of 7.3% in 2021, while the National Bank of Ukraine (NBU) 7%. At the same time, the NBU said that inflation in the first quarter was higher than its expectations. According to the NBU, a turning point ininflationary dynamics may occur in August or September 2021.
Oxford Economics has improved its forecast for Ukraine’s real GDP growth in 2021 to 4.9%, up from 4% in the February forecast.
As evidenced by the May forecast, which is available to Interfax-Ukraine, the analysts have worsened their expectations for the growth of the Ukrainian economy in 2022 to 3.7% compared to the February forecast being 4.2%, and in 2023 they expect the decline in rates to continue – growth to 2.9%.
Strong growth in industrial production in April, a year after a series of lockdowns, marks a turning point that will see GDP grow by almost 5% this year, and then just over 3.5% in 2022, Oxford Economics said.
At the same time, the average annual hryvnia exchange rate in 2021 is expected at UAH 28.60/$1, in 2022 – UAH 29.30/$1, in 2023 – UAH 29.40/$1, according to Oxford Economics.
The analysts have raised their inflation forecast to 7.2% this year (in the February forecast it was 6.9%), and in the next two years they expect prices to rise by 4.9% and 5.2%, respectively.
The analysts continue to expect the current account to return to a deficit of 1.5% of GDP this year, while in 2020 the current account surplus reached 4% of GDP. According to their estimates, in 2022 and 2023 this indicator will remain in deficit and will amount to 2% and 1.7%, respectively.
Private investment is projected to recover cautiously, so the recovery will be more dependent on household and government spending. However, rising demand will push companies to further expand their production capacity from 2022.
Oxford Economics expects the budget deficit this year to be 4.6%, and in 2022 and 2023 it will decrease to 3.2% and 3.4%, respectively.
At the same time, the analysts predict a reduction in the ratio between public debt and GDP from 59.2% in 2020 to 56% in 2021, as well as to 52.4% and 49.7% in the next two years.
Oxford Economics expects Ukraine to be able to unlock the IMF program in the third quarter of 2021. At the same time, political risks remain high, according to the forecast.
On June, 5-6 2021 in the «Kyivan Rus Park» the Open horseback archery championship of Ukraine «Kyivan Rus» for the Cup of prince Volodymyr will take place. Also in program: demonstrative performances of ancient martial arts, shooting from the Trebuchet, horse riding and traditional ancient Slavic amusements.
The event is held in accordance with the requirements of the quarantine regime.
Ancient Kyiv opens at 10:00. The program starts at 14:00.
* The event program is subject to change.
The ticket price: a full adult ticket – 250 UAH, for pensioners and students – 150 UAH, for schoolchildren – 100 UAH, for preschool children – for free.
Ancient Kyiv in the «Kyivan Rus Park» is located in Kyiv region, Obukhiv district, the vill. Kopachiv.
Details on the website www.parkkyivrus.com
The Interfax subscribers can save money with the “openbusiness-20” promo code for a 20%-discount for a full price adult ticket to the Principality of Kyivan Rus:
– by previous order by tel.: +38 044 461-99-37, +38 050 385-20-35
– or at the cash desk at the entrance to the «Kyivan Rus Park».
State-controlled Oschadbank (Kyiv) issued loans for a total of UAH 2.6 billion in January-May 2021, which is 2.6 times more than in the same period in 2020 (UAH 1.1 billion), the press service of the bank said.
According to the report, over the five months of 2021, the loan portfolio issued by the bank to micro, small and medium-sized businesses increased by UAH 1.2 billion, or 20.7%, to UAH 7 billion.
As noted by the press service, the growth of the portfolio is due, inter alia, to the active participation of Oschadbank in various programs to support entrepreneurship, in particular in the Affordable Loans 5-7-9% state program.
In addition, the number of partnership programs of Oschadbank with manufacturers of equipment and plant protection products has reached 230, the report says.
Oschadbank was founded in 1991. Its sole owner is the state.
According to the statistics of the National Bank, as of March 1, 2021, in terms of total assets (UAH 279.702 billion) Oschadbank ranked second among 73 banks operating in the country.
Ukraine in 2020 reduced steel exports to 15.2 million tonnes from 15.6 million tonnes a year earlier, but rose in the ranking of exporters from the tenth to the ninth place, according to the World Steel Association (Worldsteel).
According to the report, India was ranked higher than Ukraine last year among exporters with 17.1 million tonnes, Italy closed the top ten with 14.9 million tonnes, and China is still at the top of this list with 51.4 million tonnes, followed by Russia with 31.5 million tonnes and Japan with 29.8 million tonnes.
At the same time, due to the small volume of imports, Ukraine in the world ranking of net exporters in 2020 retained its fourth place with an indicator of 13.9 million tonnes, which is only slightly less than the 2019 indicator of 14 million tonnes.
The first place here is taken by Russia with 26.4 million tonnes, the second – by Japan with 24.8 million tonnes, the third – by South Korea with 16.1 million tonnes, while China is the fifth in this list with 13.5 million tonnes.
China was the largest importer of metal last year with 37.09 million tonnes, followed by the EU-28 with 32.6 million tonnes, excluding interregional trade, and the United States came third with 19.9 million tonnes.
In the ranking of net importers over 2020, the United States is leading with 13.6 million tonnes, the EU-28 is in the second place with 10 million tonnes, and Saudi Arabia is in the third place with 7.2 million tonnes.
Worldsteel recalls that in 2020 Ukraine produced 20.6 million tonnes of steel and took 12th place, the volume of pig iron production amounted to 20.4 million tonnes. At the same time, the country exported 3.1 million tonnes of pig iron last year, and its apparent consumption amounted to 17.3 million tonnes.
Apparent steel consumption in Ukraine in 2020, according to the association, amounted to 4.6 million tonnes, while consumption per capita – 105.5 kg.
