Same as before, the NBU expects inflation to decline to 6.3% as of the year-end. On the one hand, core inflation will slow more than expected, while fuel prices will remain below last year’s levels due to the stronger hryvnia. On the other hand, smaller supply of some vegetables will push prices upwards.
However, these factors will offset each other, which leaves this year’s inflation forecast unchanged. Inflation will meet the target range of 5%+/-1 pp in early 2020 and reach the medium-term target of 5% at the end of 2020. As in 2019, tight monetary conditions will curb price growth.