“According to the National Bank, inflation will peak in the third quarter of 2021, primarily due to last year's low comparison base. However, inflation will start to decelerate in autumn, reaching 8% as a result of 2021, as new harvest supplies come to the market, the effect of a low comparison base wanes for some products, and the NBU raises its key policy rate,” reads the report.
At the beginning of 2021, the rapid growth in inflation rate was driven by the rise in food prices and fuel in the world, as well as high consumer demand in Ukraine.
The National Bank predicts that inflation will return to the target range of 5% ± 1 p.p. in the first half of 2022, and remain at around 5% in the coming years.
According to the results of 2021, the economy will grow by 3.8%. Consumer demand will continue to be the main driver. The gradual resumption of investment activity as the world economy recovers and the pandemic subsides will also contribute to economic growth. In 2022-2023, GDP growth will be close to 4%. The current macro-forecast is based on the assumption that quarantine restrictions in the "red” zones will be eased from May and the so-called adaptive quarantine will remain in the first half of this year.