Consumer inflation in Ukraine slowed to 3.2% in March and continues to decline - NBU
Kyiv • UNN
In March 2024, consumer inflation in Ukraine slowed to 3.2% year-on-year from 4.3% in February, and prices increased by 0.5% month-on-month, driven by lower prices for raw food and fuel due to temporary factors such as a bumper harvest, mild winter, and the transportation blockade of the western borders.
In March 2024, annualized consumer inflation slowed to 3.2% from 4.3% in February. Month-on-month, prices increased by 0.5%. The downward trend in inflation is expected to continue. The latest data of the State Statistics Service was published on the website of the National Bank of Ukraine, UNN reports.
Details
The NBU noted that the actual price growth rate was lower than its January forecast (5.0% yoy).
The agency claims that this dynamic was influenced by components that are hardly predictable, primarily raw food prices. The rapid decline in the price of such products is primarily due to temporary factors, the impact of which is likely to wear off in the second half of 2024.
These factors include the effects of last year's bumper harvest and this year's mild winter, as well as the effects of the transportation blockade of the western borders. In particular, the export restrictions resulted in an increase in the supply of certain food products on the domestic market, which led to a decrease in their prices.
In addition, fuel prices rose more slowly than Ukrainian economists expected. This was due to a moderate rise in global oil prices and an unusually warm winter.
However, underlying inflationary pressures, which are most influenced by the NBU's monetary policy, eased moderately and were fairly close to the forecast. Thus, core inflation fell to 4.2% yoy in March.
The slowdown in core inflation was driven by, among other things, the following factors:
▪️ефекти transfer from cheaper raw food products;
▪️поліпшення inflation expectations amid the relative stability of the foreign exchange market and the continued attractiveness of hryvnia instruments.
The inflation rate would have been even better if Ukraine had not been subjected to the blockade of its western borders, which resulted in higher import prices and increased business costs for labor.
The NBU promised that these and other factors will be taken into account when making monetary policy decisions and in the updated macroeconomic forecast, which will be published at the end of this month.
Consumer inflation continued to decelerate, driven by an easing in underlying inflationary pressures and a decline in the price of certain food products due to temporary supply-side factors. These and other factors will be taken into account when making monetary policy decisions and in the updated macroeconomic forecast.
Eurostat: inflation in the Eurozone fell to 2.4% in MarchApr 4 2024, 02:57 AM • 45829 views
