What is happening with prices in Ukraine and what should we expect by the end of the year?

Consumer inflation in July slowed to 14.1% annually compared to July of last year, and compared to June, prices even decreased by 0.2%. The actual inflation numbers turned out to be lower than the NBU’s July forecast, mainly because of a faster decline in vegetable prices due to the new harvest, the National Bank explained.

As a result, the growth in prices for processed products slowed to 18% annually. Services inflation dropped to 14% amid weaker pressure from the labor market, and in the non-food segment, price growth slowed to 3.2%.

“The NBU forecast predicts a further decline in inflation both by the end of this year and in the coming periods. Monetary policy measures, a gradual increase in yields, and moderate external price pressures will contribute to reducing inflation”, the National Bank added.

Former Member of the NBU Council Bohdan Danylyshyn noted that the inflation rate in Ukraine is influenced by pro-inflationary factors – including high growth in production costs, weather conditions, a significant fiscal deficit, increases in certain tax rates, a partial recovery of deferred demand, the devaluation of the hryvnia against the euro, and substantial slowdown in economic growth.