Page 51 - Eastern Europe Outlook 2020

● Inflation and monetary policy rate
The NBU defeated inflation in 2019 after grappling with it in 2018.
Consumer price inflation slowed to 7.5% in September and then dropped to 5.1% in November, only just above the NBU’s target rate of 5% and half the 10% inflation was running at in November 2018.
The NBU has kept very high monetary policy rates in place despite the crushing effect they have on growth, but it stuck to its guns and by the end of 2019 inflation was falling rapidly, approaching the 5% goal which it initially expected to reach only in the fourth quarter of 2020.
Ukraine now has a strong deflationary trend and inflation is expected to continue to fall in 2020, which will be accompanied with more rate cuts.
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