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The National Bank of Ukraine expects that inflation will fall to a single level at the end of 2021, and by the end of the next year – will reach the target of 5%.

This is stated in the materials of the regulator.

It is noted that the National Bank maintains the inflation forecast for 2021 at 9.6%. According to the Central Bank, the peak of consumer price growth falls on September-October this year, and in the future the inflationary trend will unfold.

“Inflation will slow down due to exhaustion of the effects of a low base of comparison, maintaining a favorable situation in the foreign exchange market and high crop yields. Rising consumer prices will also be restrained by previous steps of the National Bank to strengthen monetary policy. increase in the discount rate “, – it is told in the message.

The NBU predicts that under the influence of these factors, inflation will slow to 5% at the end of 2022 and will continue to be near the target. The rapid decline in inflation will be hampered by the longer-term maintenance of energy prices at high levels and stable consumer demand. In addition, given the time-stretched effects of these pro-inflationary factors, a slowdown in inflation to the 5% target will require the National Bank to tighten monetary conditions in 2022-2023 than projected in the regulator’s July forecast.

It is noted that in September, consumer price growth accelerated to 11% year on year. Inflation continued to be fueled by a number of external and internal factors. Prices in world commodity markets remained at a high level, and, as expected, stable fundamental pressure remained. Higher production costs of business for wages, raw materials and energy affected the dynamics of consumer prices. Inflation expectations also remained high.

At the same time, the favorable situation in the foreign exchange market slowed down the growth of prices. In particular, due to this, core inflation was below the July forecast trajectory.