The government predicts an acceleration of inflation in the coming months.

As noted by the Ministry of Economy, in January through May the trend of slowing inflation continued; consumer inflation was the lowest in recent years – 2% since the beginning of the year. Annual inflation in May was 3.3%, below the NBU’s target range (5%).

The current “sluggishness” of prices reflected changes in the economy’s structure during the war – suppressed consumer demand did not match the gradual recovery of domestic supply, including the large harvest of 2023 and imports, which ensured market saturation  with the present limited export opportunities.

At the same time, the temporary supply surplus only partially restrains inflation; accordingly, other factors in the food market (in particular, seasonality) may influence inflation during certain months. In addition, the influence of Ukraine’s limited power supply is being increasingly felt in the increase in logistics costs and an increase in raw material purchase prices.

Other inflationary factors, such as the destruction of many infrastructure facilities, the need to rebuild the energy industry, and the restructuring of production processes, are expected to prevail soon.