Consumer prices continued to fall in June - NBU
Kyiv • UNN
In June, overall inflation in Ukraine continued to slow down due to the expansion of food supply. At the same time, core inflation accelerated due to rising business costs.
According to the NBU's estimates, overall inflation continued to slow down in June, as stated in the regulator's new macroeconomic and monetary review, UNN reports.
According to the NBU's estimates, the decline in overall inflation continued in June due to the further expansion of the supply of certain raw food products, while core inflation accelerated
In May, overall inflation reportedly slowed to 8.2% year-on-year (y/y) "due to the expansion of the supply of certain raw food products." At the same time, core inflation accelerated to 7.9% y/y "as a result of further increases in business costs, particularly for labor, energy resources, and logistics, as well as the effects of the hryvnia's weakening in previous periods."
"Households' inflation expectations remained volatile and elevated against the backdrop of high fuel prices and increased public transport fares. At the same time, financial analysts' expectations remained stable," the report says.
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Business sentiment in June, according to the NBU, slightly deteriorated amid intense Russian attacks on business facilities. At the same time, economic activity picked up in a number of sectors. The activation of grain cargo exports supported the transport sector, improved consumer sentiment supported trade, and a better situation in metallurgy and increased gas production supported industry. However, the construction sector continued to decline.
The supply of labor, the report says, continued to grow faster than demand, but a significant shortage of personnel persisted in the market, forcing employers to raise wages. Wage growth accelerated in both nominal and real terms, the NBU stated.
The trade deficit in goods in May, it is noted, narrowed both due to lower volumes of energy purchases and as a result of a seasonal decline in demand from farmers. The current account deficit decreased to $3.7 billion compared to $4.8 billion in April. In June, Ukraine received over $15 billion in external financing, a significant portion of which replenished international reserves, contributing to the resumption of their growth.
"The state budget deficit in May-June increased significantly due to increased expenditures against the backdrop of the receipt of significant volumes of external financing," the NBU stated.
Activity in the domestic debt market in June, it is reported, picked up. The rollover rate for domestic government bonds (DGBs) in all currencies since the beginning of the year was 112%.