Underlying inflationary pressures in Ukraine have increased more than expected. This is due to the effects of this year's poor harvest and the impact of higher business costs. Although core inflation has reached 6.5% (up from 5.7% in mid-summer), the NBU forecasts a moderate increase in prices; the regulator promises to return the rate to 5% over the next few years.
Writes UNN with reference to the press service of the National Bank.
Details
The NBU believes that inflation will remain moderate in the coming months. Although inflationary pressures will remain in Ukraine due to higher business costs for labor and electricity, a gradual increase in excise taxes, and the effects of the hryvnia devaluation carried over from previous months. At the same time, the financial regulator will make efforts to return to the previous periods' figures, with a target of 5%.
The NBU's measures to protect hryvnia incomes will contribute to this, the report says. It also mentions household savings from inflation and measures to ensure the stability of the foreign exchange market.
Context
Ukraine's core inflation rate rose to 6.5% in August from 5.7% in July.
Consumer inflation accelerated to 7.5% yoy from 5.4% in July.
UNN reported that in the consumer market in August , prices for food and non-alcoholic beverages increased by 0.9%, 6% year-on-year. Eggs and vegetables reportedly rose the most (by 7.1% and 5.2%) over the month. Prices for bread, sugar, pasta, processed cereals, sunflower oil, rice, meat and meat products, milk and dairy products, butter, soft drinks, fish and fish products increased by 2.4-0.7% in August. At the same time, prices for fruit fell by 7.4% over the month.