The National Bank of Ukraine (NBU) says that dynamics of consumer prices in 2017 were close to the forecasts and the regulator expects inflation in 2017 will be within the previously defined band: 8 percent plus or minus two percentage, points, the NBU has said on its website.
“The slight acceleration in annual inflation in January was expected and occurred against a background of increasing production costs, growing price of raw materials on the world markets, including those of oil and food, as well as the weakening of the hryvnia at the end of 2016 and the first half of January 2017. The National Bank expects a further slowdown in inflation by the end of 2017 to 9.1 percent, which would correspond to a target of 8% +/- 2 percentage points,” it said.
As was reported, the NBU in late January raised its inflation forecast for 2017 to 9.1 percent from 8 percent, primarily due to the minimum wage increase since the beginning of the year from Hr 1,600 to Hr 3,200 per month.
This decision of the government will affect inflation both directly through an increase in consumer demand, mainly for industrial products, and in production costs, and indirectly through inflation expectations of Ukrainians, the central bank said.
At the same time, the regulator expects inflation within a previously set reference point: 8 percent +/- 2 percentage points in 2017 and 6 percent +/- 2 percentage points in 2018.
