FOLLOW US ON SOCIAL

Posted On

03
May
2022

NBU expects inflation to increase to 15.9% in April

KYIV. May 3 (Interfax-Ukraine) – Inflation in Ukraine in annual terms in April may increase to 15.9% from 13.7% in March, this forecast was given by Governor of the National Bank of Ukraine (NBU) Kyrylo Shevchenko, referring to the NBU estimates based on web-scraping (a method of collecting prices from online supermarkets).

"Amid the war, it is impossible to avoid price increases … at the end of the year it (inflation) may exceed 20%. This is a significant level of price growth, but controlled. And such indicators are not comparable with 2015, when inflation reached 60% in some months," he said in the column for NV.Business.

Shevchenko stressed that the NBU has significant experience in fighting inflation.

"In general, there have been no cases in world history when a country entered into a state of martial law, having such a highly developed financial system and monetary policy," he added.

The banker noted that market mechanisms will have a limited impact on the market, the regulator will keep price growth by fixing the exchange rate and maintaining part of the restrictions.

"But as soon as monetary transmission channels start working and uncertainty decreases, we will return to the inflation targeting regime, which at one time helped overcome the same 60% inflation," Shevchenko said.

According to him, the National Bank will gradually restore the forecast cycle and again begin to apply the refinancing rate to reduce inflation to the target of 5% and keep inflation expectations under control.

As the State Statistics Service reported, consumer price growth in Ukraine in March 2022 accelerated to 4.5% from 1.6% in February, 1.3% in January and 0.6% in December. In March last year, inflation was 1.7%, so in annual terms in March this year it rose to 13.7% from 10.7% in February and 10% in January.