REUTERS
The National Bank of Ukraine (NBU) considers that the inflation targets for 2017 and 2018 (8%+/-2 ppts and 6%+/-2 ppts, respectively) remain within reach, according to the NBU's website.
Annual inflation is projected to remain high in the first three quarters due to statistical base effect. Only in Q4 2017 will it return to single-digit level, according to the regulator's data.
"In its turn, a pick-up in economic activity continued to spur labor demand. In January, real wages rose by 21.4% year-over-year (y-o-y), underpinned by strong labor demand and an increase in the minimum wage. As expected, the growth of real wages could renew demand-pull pressures on prices," the NBU said in a statement.
The regulator also said that in January 2017, inflation accelerated to 12.6% y-o-y, which was driven by higher production costs, in particular labor costs, rising global commodity prices, and the weakening of the hryvnia in late 2016 and early January 2017. It also noted that inflation accelerated further in annual terms in February 2017, primarily due to base effects.
Read alsoCabinet to abandon regulation of prices for socially important productsAs UNIAN reported earlier, the National Bank of Ukraine decided to maintain its key policy rate at 14% per annum, as well as the previous two months in a row.
The NBU's maximum historical policy rate at 30% per annum operated from March 4 to August 28, 2015.
Read alsoExperts predict 2-3% GDP growth in Ukraine in 2017Inflation in Ukraine in January 2017 accelerated to 1.1% compared to the previous month and up to 12.6% y-o-y.