to decline to 6. 3 % at year - end 2019 and reach 5. 0 % at the end of 2020. that said, inflation will already be in the target range of 5 % + / - 1 pp in early 2020, as planned. the disinflation will primarily be due to the tight monetary policy. inflation will be also 1 / 3 bis central bankers'speeches curbed by : prudent fiscal policy driven by the repayment of large volumes of public debt in 2019 – 2020 ; slower wage growth, as domestic wages converge with wages in neighboring countries and migration moderates ; relatively low exchange rate volatility resulting in low imported inflation ; a decrease in energy prices in the global markets ; weak growth in raw food prices. these factors will make core inflation decline to 5 % in 2019, down from 8. 7 % in 2018, and to a level below 4 % in 2020 – 2021. at the same time, the further planned increases in administered prices, which are required to bring them to market levels, will impact consumer price inflation. the nbu has also performed scheduled revisions of other macroeconomic forecasts last year, the ukrainian economy grew more rapidly than in any of the past seven years – by 3. 3 % according to our latest estimates. however, real gdp growth will slow to 2. 5 % this year, as predicted. the slowdown will be driven by the tight monetary policy necessary to bring inflation down to the target level and by the conservative fiscal policy intended to finance significant public debt repayments this year. in addition, the grain harvest is expected to decline from the record levels that made agriculture the primary driver of economic growth. another factor will be a gradual deceleration of growth in the global economy and trade, including due to protectionist measures. private consumption will remain a key driver of growth as real household income – wages, pensions, and remittances from abroad – continues to grow. although investment activity will slow down, it will remain an important driver of demand for investment imports. as a result, even given a revival in export - oriented industrial production and record grain exports, imports will grow faster than exports in real terms. consequently, the contribution of net exports will remain negative, although smaller than before. next year, real economy growth will start to accelerate, hitting 2. 9 % in 2020 and 3. 7 % in 2021. the growth will mainly be propelled by a gradual easing in monetary policy, which will bolster domestic demand

( ii ) the sizeable exposures of the financial sector to this form of risk ; and ( iii ) the presence of externalities. the financial sector is exposed to these physical risks through several channels. physical risks are of course relevant for the valuation of real estate assets, the main collateral of bank loans. physical risks also matter when assessing the ability to pay of borrowers involved in p. bolton, m. kacperczyk, h. hong and x. vives ( forthcoming ), “ resilience of the financial system to natural disasters ”, iese business school and cepr. see the financial stability board ( november 2020 ) : the implications of climate change for financial stability. sectors that could be particularly affected, such as agriculture or tourism. capital destruction could also be very important. furthermore, since not all geographies would be equally affected, the migration of activities and of the population in some areas will increase, generating an impact on the financial sector as well. precisely to prevent these risks increasing further, acting to prevent the materialisation of climate change is essential. however, such interventions, and the accompanying changes in consumer and investor sentiment in favour of a greener economy, may also create their own particular risks to the financial sector. indeed, the transition towards an environmentally sustainable economy implies a sweeping change in production technologies and a reallocation of activity across sectors and companies. actually, such restructuring will mean that, in the short run, some sectors will increase their profits while others will incur losses, with obvious implications for the financial system and its stability. in this case, for estimating transition risks, the most relevant factors are the carbon footprint and the environmental impact of the sectors and companies to which financial firms are exposed. in this context, and as part of our main responsibility to guarantee the stability of the financial system, we - regulatory and supervisory authorities - must ensure that the materialisation of climate risks does not endanger financial stability. therefore, we must make sure that financial firms address these risks. in particular, we should contribute to identifying climate - risk drivers and their transmission channels, to the adequate measurement of the economic and financial impact of the different risks, and to the definition and development of the potential mitigation and riskreduction measures. if we succeed in incorporating these risks into the decisions of the financial sector, this will translate into a change in the relative prices of financial instruments. and, in turn, that will help to internalise those