economic growth over the coming years. private 1 / 3 bis central bankers'speeches consumption growth will decelerate, albeit remaining high owing to an increase in real household income – wages, pensions, and remittances from abroad. capital investment will continue to grow rapidly, which will also provide significant support to the economy. economic growth will be dampened by a weak global economic activity and decrease in gas transit to european countries starting in 2020, due to the construction of bypassing gas pipelines. the 2019 – 2021 current account deficit will remain acceptable. in 2019, the deficit will narrow to 2. 6 % of gdp, thanks to the bumper grain harvest, a drop in energy prices, and a decline in dividend repatriation. in future, the current account deficit will widen slightly, driven by the decrease in gas transit, less favorable terms of trade, and stronger consumer and investment demand. further cooperation with the international monetary fund remains the basic assumption of the macroeconomic forecast. this will allow ukraine to attract other official financing, improve the conditions of access to the international capital markets, and support the interest of investors in ukrainian assets. these borrowings will make it possible for the government to finance large payments on the external public debt. in addition, the private sector will get an opportunity to attract foreign investment. as a result, international reserves will reach usd 23 billion in 2021. the main internal risk to the above scenario is a further strengthening of threats to macrofinancial stability. court rulings, legislative initiatives, or other steps that invalidate previous achievements, and delays in implementing key reforms may increase the vulnerability of ukraine ’ s economy and pose an obstacle to further cooperation with the imf. that could affect exchange - rate and inflation expectations and make it harder for ukraine to access international capital markets in order to repay a heavy debt load in the coming years. the following risks also remain important : a suspension of russian gas transit through ukraine starting in 2020 an escalation of trade wars and rising geopolitical tensions an escalation of the military conflict, and the imposition of new trade restrictions by russia. considering the revised macroeconomic outlook and the balance of risks that threaten to worsen it, the nbu board has decided to cut the key policy rate to 17. 0 %. the nbu has also decided, from today onward, to start publishing the forecasts of its key policy rate as part of the quarterly revisions of the macroeconomic outlook. publishing interest rate projections

of critical infrastructure remain the key risks. the nbu has revised its key assumption of the security situation forecast due to fiercer fighting and escalating military attacks on the country's critical infrastructure. the baseline scenario of the new macroeconomic forecast envisages a noticeable decrease in security risks from the start of 2024. therefore, the full unblocking of seaports and 2 / 3 bis - central bankers'speeches reductions in ukraine's risk premiums have been delayed in the nbu's forecast. more intense hostilities and greater power shortages than expected due to air attacks could dampen economic activity more significantly, while also increasing inflationary pressures. other risks also have a bearing on the forecast. if materialized, they could also require revisions in key macroeconomic indicators. that said the rapid implementation of the recovery plan for ukraine, supported by the arrival of official and private financing, could markedly speed up economic growth. in order to bring inflation back to the steady decline trajectory and to maintain exchange rate and macro financial stability amid high uncertainty, the nbu board decided to keep the key policy rate at 25 %. at the same time, the nbu has raised reserve requirements for banks, as it said it would do in december. more specifically, from 11 february the banks'required reserve ratios will be raised by 5 pp for demand deposits from, and current accounts of, businesses and households ; for deposits from, and current accounts of, nonresident banks ; and for loans from international ( other than financial ) and other organizations. in particular, from 5 % to 10 % for hryvnia funds and from 15 % to 20 % for fx funds. what is more, from 11 march the banks'required reserve ratios will be raised by another 10 pp for household hryvnia and fx demand deposits and current accounts. the banks will not be allowed to use benchmark domestic government debt securities to meet these reserve requirements. the nbu expects that these measures will help decrease the liquidity surplus in the banking system. this, in turn, will encourage the banks to compete more actively for time deposits, which will push up interest rates on hryvnia assets and increase the share of time deposits. this will make the fx market more resilient to situational factors, while also enabling the nbu to ease administrative restrictions for businesses and households in future. the revised forecast envisages keeping the key policy rate at 25 % at least until the end of q1 202