of core inflation to 5. 0 % this year and 3. 7 % in the subsequent year. the expected increase in some tariffs to the market levels and higher excise taxes on alcoholic 1 / 3 bis central bankers'speeches and tobacco products will restrain the decline in inflation. the nbu has also performed scheduled revisions of other macroeconomic forecasts economic growth will slow in 2019 to rebound in 2020. as well as in january, the nbu forecasts a slowdown in economic growth to 2. 5 %. this will be due to a slowdown in the global economy and trade, restrained fiscal policy resulting from the need to repay large volumes of public debt, and tight monetary conditions required to bring inflation to its target. moreover, the harvest of grains and oil crops is expected to be lower compared to the bumper crop of 2018. private consumption will remain the main driver of economic growth. however, its growth will decelerate due to a slower growth in real household income – wages, pensions, and remittances from abroad. investment demand will be limited by political uncertainty in the year of presidential and parliamentary elections. growth in real gdp will accelerate to 2. 9 % in 2020 and 3. 7 % in 2021. the growth will be propelled by a gradual easing of monetary policy, which will bolster domestic demand, and spur investment activity as the election cycle is over. economic growth will be restrained by decreased volumes of natural gas transit to europe as a result of the construction of bypass pipelines. in 2019, the current account deficit is projected to stay at the previous year ’ s level, at 3. 3 % of gdp, due to various factors. proceeds from the sales of last year ’ s record harvest of corn and the effect of favorable trade conditions will be offset, as the economies of ukraine ’ s main trading partners cool. the cooling will negatively affect exports and remittances from labor migrants. in future, the current account deficit will widen slightly, to 4 % of gdp in 2021, as a result of a decrease in natural gas transit and weak demand from ukraine ’ s main trading partners caused by stronger investment demand on the domestic markets. the continued fulfillment of ukraine ’ s obligations under the current cooperation program 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 active interest of nonresidents in hryvniadenominated

, and a pick - up in investment activity, as uncertainty about the political situation diminishes. after widening to 3. 6 % of gdp in 2018, the current account deficit will range between 3 % and 4 % of gdp in 2019 and 2020. in 2019, the deficit will narrow to 3. 1 % of gdp, due to the 2018 bumper corn harvest and a drop in energy prices. in 2020 – 2021, the current account deficit will widen slightly, on the back of a decrease in gas transit, a poorer grain harvest, and a rise in investment imports after the elections. a widening in the trade deficit will be offset by greater private remittances, supported by the higher incomes of labor migrants. a key assumption of the macroeconomic forecast is that ukraine will continue to cooperate with the imf and enjoy relatively favorable access to the international capital markets. 2 / 3 bis central bankers'speeches at the same time, reasonably high interest rates will contribute to the inflow of debt capital, which, together with continued inflows of foreign direct investment, will finance the current account deficit. external official borrowing and the government ’ s placement of eurobonds will make it possible to repay external public debt, the repayments of which will peak in 2019 – 2020. this will improve the expectations of economic agents and promote macrofinancial stability. as a result, international reserves will hover around usd 21 billion in 2019 and 2020. the usual increase in uncertainty during presidential and parliamentary elections poses the main risk to the said macroeconomic forecast, including ukraine ’ s ability to meet its inflation target in 2020. this, in turn, could affect inflation expectations. external risks are also important. these include : a more significant slowdown in the global economy, including in the economies of ukraine ’ s main trading partners ; a drop in the global prices of the commodities exported by ukraine ; persistently strong labor migration and the resulting pressures on wages ; geopolitical risks, such as an escalation of the azov sea conflict, which could cut export earnings ; uncertainty over the volume of gas transit through ukraine starting in 2020, as pipelines bypassing the country are being built to deliver gas to europe. why did the board decide to leave the key policy rate unchanged? taking into account the updated macroeconomic forecast and the above risks, the nbu board deems it necessary to maintain the existing reasonably tight monetary conditions in order to ensure that inflation returns to its target range in q1