NBU revises 2017 CPI forecast to 9.1% YTD
27 January 2017
Ukraine’s central bank (NBU) revised its 2017 consumer inflation (CPI) forecast to 9.1% YTD from 8.0% YTD estimated previously owing to doubled minimum wages as of Jan. 1, its website reported on Jan. 26. At the same time, the regulator is keeping its inflation target unchanged at 8% (+/- 2%) for 2017 and 6% (+/- 2%) for 2018.
Alexander Paraschiy: The media and social media networks are actively discussing the higher consumer prices triggered by doubled minimum wages, which we believe prompted the central bank to upgrade its 2017 inflation forecast. However, hardly anyone can measure the effect of the doubled wages since nothing similar had been observed in Ukraine before. But the regulator had to show that it is keeping abreast of market trends.
On our side, we are not revising our 2017 CPI forecast of 7.8% YTD, 10.5% yoy, before the January and February numbers are released. It’s worth keeping in mind that January prices will reflect ForEx volatility early in the month, while the hryvnia already started strengthening in mid-January. All in all, in light of the extreme volatility in statistics, we will be able to draw more conclusions on 2017 inflation trends upon the release of January and February inflation figures.
