The National Bank of Ukraine (NBU) expects inflation will decline to 6.3% by the end of 2019, and will reach the medium-term target of 5.0% at the end of 2020.

"By the end of 2019, inflation will decline to 6.3%. It will enter the target range in Q1 2020, and reach the medium-term target of 5.0% at the end of 2020," the NBU said in its inflation report for October 2018.

The tight monetary conditions, which were a result, inter alia, of the key policy rate hikes in the first three quarters of 2018, will be a major contributor to the slowdown in inflation, it said.

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It is reported the NBU revised its 2018 inflation forecast upwards to 10.1% (from previous 8.9%). This resulted from higher – than – projected global energy and wheat prices, and stronger growth in wages in Ukraine (compared to the July forecast).

"The expansion in consumer demand, rapid wage growth, and the recent spike in crude oil prices will continue to impact consumer price inflation next year. This will keep inflation above the target range for longer than it was projected before," reads the report.