When to expect price reductions - the NBU's answer
Kyiv • UNN
Inflation in Ukraine rose to 14.6% in March, but it is expected to decrease in the summer. By the end of 2025, it will slow down to 8.7%, thanks to the NBU's measures.
During the first quarter of 2025, inflation was expected to rise and reached 14.6% year-on-year in March. However, according to the forecast, it will return to decline in the summer and slow down to a single-digit level by the end of the year. This was reported by the National Bank, writes UNN.
Details
"In the first months of the year, inflation grew quite close to the trajectory of the NBU's previous macro forecast and reached 14.6% y/y in March. This dynamic was due to the residual effects of last year's poor harvests, further increases in excise taxes, as well as the influence of fundamental factors, in particular from the increase in enterprises' expenses on energy resources and wages, and stable consumer demand," the National Bank informs.
It is reported that the continued growth of service inflation is also an indicator of still significant domestic price pressure.
"At the same time, the monthly dynamics of inflation, adjusted for seasonality, indicates signs of weakening price pressure. This was facilitated, in particular, by the NBU's measures to maintain the stability of the foreign exchange market and the controllability of inflation expectations," the statement reads.
As indicated, the March survey showed a further improvement in household expectations, and statistics on search engine queries showed a decrease in public attention to the topic of inflation from peak levels at the beginning of the year. On the other hand, the inflation expectations of enterprises and banks have deteriorated somewhat.
In general, it is noted that despite the increase in the inflation rate in annual terms, the inflation expectations of economic agents remain relatively stable.
The National Bank reports that inflation will return to decline in the summer and slow down to a single-digit level by the end of the year.
According to the NBU's forecast, in the summer, price increases in annual terms will begin to slow down for a wide range of goods and services. The expected increase in harvests will contribute to a decrease in food inflation from the third quarter of 2025 and its stabilization at a relatively low level in the future
Fundamental inflationary pressure will gradually subside under the influence of the NBU's monetary policy, improved electricity supply, and more moderate pressure from the labor market, the NBU said. An additional factor, as indicated, will be a decrease in oil prices as a result of trade confrontations in the world.
As a result, inflation will decrease to 8.7% at the end of 2025, and to the target of 5% in 2026
Addition
According to the State Statistics Service, inflation in the consumer market in March 2025 accelerated to 14.6% year-on-year, compared to February 2025 was 1.5%, since the beginning of the year - 3.5%.
