Why inflation will rise in Ukraine and how it will affect prices

In 2023, inflation fell sharply compared to the end of 2022. While in the first year of the full-scale war, consumer prices rose by 26.6%, last year they rose by 5.1%, according to the NBU, UNN reports .

Details

In 2023, inflation declined sharply compared to the end of 2022. In the first year of the full-scale war, consumer prices rose by 26.6%, and last year by 5.1%.

Fixed tariffs for certain housing and utility services, such as gas, heating, and hot water, continued to play an important role in containing inflation. Thanks to a bumper harvest, food prices also slowed down. Reduced raw materials and logistics costs also had an important impact on these dynamics.

Also, due to the global decline in oil prices, prices for food raw materials on the domestic market have fallen, in particular due to high harvests. In addition, the establishment of alternative supply routes has made the delivery of goods less expensive.

The NBU's measures to support the stability of the foreign exchange market helped to slow inflation The NBU predicts that inflation will only moderately accelerate to 8.6% this year. The main reason for this will be slightly lower harvests, as last year's high yields were achieved due to extremely favorable weather conditions, and this year's yields are likely to be close to average climatic norms. In addition, the negative impact of the war on business costs will continue.

At the same time, the NBU expects that in the coming years, as the security situation improves, inflation will again decline to the target range of 4-6%.

Recall

In 2023, almost 8 million card transactions worth more than UAH 6 billion were registered, and Ukrainiansmade about 90.0% of non-cash transactions through contactless cards.

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