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  • Hryvnia rate survey data
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KYIV, Jan. 5 (Reuters) – Ukraine’s inflation, currently at a four-year high of 10.3%, will slow this year but will likely remain above the central bank‘s 5% target due to prices high food and gas, according to a Reuters poll of analysts. Wednesday.

The National Bank of Ukraine (NBU) raised interest rates five times in 2021 to 9.0% after cutting rates to an all-time low in 2020 to support an economy reeling from the COVID pandemic -19.

The NBU is also assessing the risks of a major military confrontation with Russia. An accumulation of Russian troops and military materiel near Ukraine’s borders has alarmed Kiev and its Western allies.

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Ukrainian bank and brokerage analysts see inflation in 2022 at 6.7% compared to around 10.2% in 2021, according to the Reuters poll.

“Inflation remains above the central bank’s target due to a combination of supply and demand factors,” said Vitaliy Vavryshchuk of brokerage firm ICU, adding that food prices remained. the main engine.

“Cereal and oilseed prices are 20-30% higher than last year’s levels, which is also fueling meat and dairy prices,” Vavryshchuk said.

Data from the State Statistics Service showed that food prices rose 13.9% in November year-over-year. Bread was 18.1% more expensive, while prices for meat and milk jumped 13% and 10.1% respectively.

“We see two main risks to price stability: high energy prices (especially gas) and the continuing tense situation on the border with Russia,” said Konstantin Fastovets of Adamant Capital.

“It will be very difficult for the central bank to manage these two factors,” he added.

Gas prices doubled in Ukraine in April-September compared to the same period of 2020.

The government has capped household tariffs during the winter heating season which runs until April. But analysts expect the caps to be lifted in line with the government’s reform commitments to the International Monetary Fund as part of a $ 5 billion deal.

Analysts also predicted that the Ukrainian economy would grow by 3.3% in 2022 after an expected growth of 3.0% in 2021 and that the Ukrainian currency would weaken to 28.1 hryvnia per dollar over a period of 12 months from the current level of 27.3.

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Editing by Matthias Williams and Gareth Jones

Our standards: Thomson Reuters Trust Principles.