The National Bank of Ukraine, which downgraded its inflation forecast for 2024 from 8.5% to 9.7% at the end of October, suggests that inflation may exceed 10% by the end of this year, reports the correspondent of the "Interfax-Ukraine" agency.
"It is likely that inflation will be slightly higher (than the forecast), probably above 10%, and we expect it to slow down to around 7% next year, reaching the target (5% – IFO-Ukraine) by 2026," – said NBU Deputy Head Serhiy Nikolaiychuk during a discussion organized by the Center for Economic Strategy in Kyiv on Tuesday.
According to him, some factors contributing to the acceleration of inflation are temporary, particularly those related to a smaller harvest and rising food prices.
Among other reasons for rising prices, he mentioned issues in the energy sector and increased wages.
"However, in the medium term, it is much more important for the National Bank to focus on creating monetary conditions to bring inflation closer to the target," – emphasized Nikolaiychuk.
He pointed out that currently the only organization that does not believe in the National Bank's ability to reduce inflation is the government, which forecasts it at 9.5% next year. "This seems strange," – said the NBU Deputy Head.
He noted that the baseline scenario for economic growth – 4% this year and 4.3% next year – remains relevant despite the results of the U.S. elections.
"The risks of both improving and worsening the forecast due to the elections have increased," – Nikolaiychuk added.
As reported, according to state statistics, consumer price growth in Ukraine accelerated to 1.8% in October 2024 from 1.5% in September, 0.6% in August, and zero in July.
In annual terms, inflation at the end of October 2024 rose to 9.7% from 8.6% at the end of September, 7.5% at the end of August, and 5.4% at the end of July.
Inflation in Ukraine fell to 5.1% in 2023 after a surge to 26.6% in 2022 from 10.0% in 2021.