Inflation in Ukraine to grow by 8.5%: NBU downgrades forecast
NBU Governor Andrii Pyshnyi (facebook.comNationalBankOfUkraine)
The National Bank of Ukraine (NBU) has revised its forecast for consumer price growth in Ukraine for 2024, raising it to 8.5%. In April, the central bank had projected inflation at 8.2%, according to NBU Governor Andrii Pyshnyi.
Additionally, the NBU forecasts inflation for 2025 at 6.6% (previously 6.0%); in 2026, inflation is expected to fall to 5.0% (previously 5.0%).
As Pyshnyi noted, after a prolonged period of decline, inflation resumed growth in May and accelerated to 4.8% year-on-year in June.
"Price pressure will persist in the coming months due to further increases in business costs, higher excise taxes, the exhaustion of the effects of last year's significant harvests, and the negative impact of summer drought on this year's yields," he said.
According to him, preliminary inflation estimates for July confirm its further acceleration.
At the same time, inflation will remain moderate at 8.5% by the end of the year. This will be aided, in particular, by NBU measures to protect the hryvnia incomes and savings of the population from inflation and to ensure the stability of the currency market. The ongoing moratorium on raising housing and communal tariffs for gas, heating, and hot water will also have a restraining effect on prices, Pyshnyi added.
"Balanced interest rate and exchange rate policies of the NBU, along with easing external inflationary pressures, will allow inflation to slow down to 6.6% in 2025. In 2026, inflation will return to the NBU's target of 5% amid a gradual normalization of the economy's functioning and further improvements in the energy sector," said Pyshnyi.
Inflation in Ukraine
In 2023, consumer inflation in Ukraine was 5.1%, significantly lower than in 2022 (26.6%).
Consumer prices in Ukraine rose by 2.2% in June 2024. Since the beginning of the year, prices have increased by 4.3%. Annual inflation accelerated to 4.8%.
