Daily Insight -- NBU revises inflation forecast to 9.1%

​The NBU upwardly revised its outlook from 8% to 9.1%, and has retained its 2018 inflation outlook at 6%. The inflation forecasts remain within the announced target bands (8% + 2 pp for 2017 and 6% + 2 pp for 2018). The revised inflation outlook is affected by a twofold increase in the minimum wage. The NBU expects core inflation to come in at 6.3% and raw materials inflation at 7%, mainly due to the recovery of domestic demand. Over the intermediate term, core inflation is forecast to be 5%. Consumer prices rose 12.4% in 2016. Producer prices surged 35.7% in 2016, mainly affected by growth of global commodity prices. Producer prices are forecasted to grow 10.2% in 2017.