The National Bank of Ukraine forecasts a moderate increase in inflation in the coming months, but expects prices to begin to stabilize next year. NBU Chairman Andriy Pyshny said this during a briefing, noting that inflation will increase due to several key factors, but will gradually return to the target level of 5%.
The main reasons for the price increase in the coming months are the expansion of aggregate demand due to increased budget expenditures, increased business costs for labor and electricity, as well as increased excise taxes. However, Pyshny stressed that the National Bank's balanced monetary policy and reduced external price pressure will help slow inflation.
Discount rate and inflation
The National Bank of Ukraine's Board of Directors has decided to keep the key rate at 13%, which, according to the NBU Governor, will contribute to a gradual return of inflation to the target level of 5% in the coming years. This decision also supports the stability of the foreign exchange market, which is an important element for controlling inflationary processes.
According to the State Statistics Service, inflation accelerated to 7.5% in annual terms in August 2024, which is close to the NBU's forecasts. Compared to July, inflation in August increased by 0.6%, and since the beginning of the year - by 4.9%.
What has become the most expensive?
August saw a significant increase in prices for some products. The biggest increases were in the prices of eggs (by 7.1%) and vegetables (by 5.2%). At the same time, prices for fruits decreased by 7.4%. The increase in consumer prices in August was due to poorer harvests this year, higher costs for food raw materials, energy, labor, and the impact of the weakened hryvnia exchange rate.
Future predictions
Despite the short-term increase in inflation, the National Bank expects it to gradually decline to the 5% target over the coming years. This will be achieved by reducing external price pressures, controlling the foreign exchange market, and stabilizing the economic situation in the country.
