The national Bank lowered the discount rate and downgraded growth
Tomorrow, April 14, the discount rate of the national Bank of Ukraine will be reduced by one point to 13%.
The corresponding decision today, on April 13, was made by the Board of the NBU.
Note that the Bank began to raise interest rates three years ago in April. Then a figure rose from 6.5% to 9.5%. A year later, in March 2015, the interest rate increased to the highest figure in three years – up to 30%. After that, thanks to the economic recovery, the rate is gradually reduced. At 14% it held for the last six months – from October 28, 2016.
We will remind, in Ukraine in March, the inflation rate increased to 15.1% compared to March. The growth in February is 1.8%. And from the beginning of 2017 compared to December, the inflation rate is 3.9%. According to world Bank forecasts, by the end of the year the figure will rise to 10%.
NBU also revised the GDP growth forecast for the next three years.
“In 2017, economic growth will slow to 1.9%. The deterioration of the forecast due to the expectation that the blockade in the East of the country and the loss of production capacities at the enterprises located in areas outside the control, will lead to a drop in industrial production in some sectors. In particular, in metallurgy, mining, coke production and power generation. Partially the negative effect will be offset by a more favourable external environment. In 2018-2019, real GDP growth will accelerate to 3.2% and 4.0% respectively”, – stated in the message.
International reserves, according to Bank, will amount to 21.1 billion U.S. dollars at the end of 2017 and 26.2 billion US dollars at the end of 2018.