In February, annual inflation slowed to 4.3%, but its growth is expected to increase in the second half of the year. This is stated in a press release of the NBU, UNN reports.
Details
According to the NBU, in February, annual inflation slowed to 4.3%, while core inflation fell to 4.5%, due to an increased supply of certain food products and the impact of last year's bumper harvest. Prices were also favorably affected by warm weather, which stimulated increased sales of food from storage, reducing prices for some vegetables.
Some producers shifted their focus to the domestic market, which affected food prices. In addition, inflation was limited by a moratorium on raising some utility tariffs.
According to the National Bank of Ukraine, inflation will remain within the target range of 5% ± 1 in the coming months and will only moderately accelerate in the second half of the year.
Gradual growth in household incomes and business spending in the wartime will increase inflationary pressures. Fixed housing and utility tariffs and monetary policy will continue to limit the growth of consumer prices.
The NBU's January forecast was based on the assumption that the security situation will improve significantly starting in 2025, but the risk of continued Russian aggression remains.
The prolonged war is expected to slow economic recovery and complicate the NBU's task of keeping inflation close to the 5% target in 2025-2026.
Recall
The National Bank of Ukraine cut the key policy rate by 0.5 percentage points to 14.5% effective March 15, 2024, resuming the interest rate easing cycle for the first time since December 2023.