Economic Development Ministry forecasts 5.5% inflation in 2020

Economic Development Ministry forecasts 5.5% inflation in 2020

The Ministry of Economic Development, Trade and Agriculture has predicted that inflation will be at the level of 5.5% in Ukraine in 2020.

Minister of Economic Development Tymofiy Mylovanov wrote about this on Facebook.

“According to the Ministry’s baseline forecast (scenario one), inflation forecast (consumer price index) for the next 3 years will be the following: 5.5% in 2020; 5.3% in 2021; 5.1% in 2022,” Mylovanov wrote.

He also added that under the Ministry’s optimistic scenario, inflation is expected to reach 5.8% in 2020, 5.0% in 2021 and 2022.

“The difference between baseline and optimistic forecasts is in the share of investments in the economy. The optimistic scenario envisages 3 billion more foreign investments. This scenario requires a better business climate, no corruption in government and local government, efficient judicial system, reforms (including the liberal land market and privatization),” the minister wrote.

According to Mylovanov, the optimistic scenario predicts higher inflation by 0.3% in the first year due to a larger percentage of investments.

“In the coming years, inflation will be slightly lower, by 0.3% and 0.1%, respectively. This will take place due to an increase in production and added value in the economy after investments take effect,” the official concluded.

As Ukrinform reported, the National Bank of Ukraine (NBU) stated in its quarterly inflation report for October 2019 that inflation will fall to 6.3% at the end of 2019 and come to the target range (5% ± 1 p.p.) in early 2020 and reach the mid-term target of 5% at the end of 2020. At the same time, Ukraine's economy will grow by 3.5- 4% in 2019-2021.

Also, the Board of the National Bank decided to reduce the discount rate from 16.5% to 15.5% per annum from October 25, 2019.


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