Price growth will slow down sharply in Ukraine: NBU has updated its forecast

, 20:13, 27.07.2023
Estimated reading time: 4 minutes

The National Bank of Ukraine forecasts that the growth of consumer prices will slow down by the end of 2023. It should be 10.6%. The updated forecast says that inflation will slow down to 8.5% in 2024

Price growth will slow down sharply in Ukraine: NBU has updated its forecast

NRF Reports that Economy Has Strong Momentum Despite Inflation and Ukraine

This was stated by the head of the National Bank of Ukraine Andriy Pishnyi in a news broadcast on YouTube. An increase of 14.8% was expected.

The updated forecast says that inflation will slow down to 8.5% in 2024 (previous forecast - 9.6%), and inflation will amount to 6.0% in 2025. Pyshnyi stressed that the inflation forecast for the current year has also improved based on the dynamics of the first half of the year.

“Price growth will slow down due to a gradual decline in global inflation and still quite tight monetary conditions in Ukraine. The NBU will ensure the stability of the currency market and a sufficient level of attractiveness of hryvnia assets, which will limit the price pressure,” he noted.

However, the decline will be slower in the future. This is due to the exhaustion of the comparative base effect, the return to the pre-war level of fuel taxation and the increase in electricity prices for households in June. Additionally, the price dynamics will be affected by the Russian attacks in southern Ukraine.

The NBU predicts that the downward trend in inflation will continue. Reducing security risks will help restore optimal logistics routes, expand production and increase efficiency. It will also pave the way for restoring investment flows to Ukraine.

“A further decline in world prices, in particular energy, will contribute to curbing inflation. The above-mentioned factors will outweigh the pro-inflationary effects of the revival of domestic demand, wage growth and the adjustment of some housing and communal tariffs in the post-war period, summed up the head of the NBU.

Prices in Ukraine

In June, food prices increased by 0.1% compared to May. This is the lowest level of growth since the beginning of the year, but Ukrainians are likely to face a new price increase now. This will be influenced by the increase in electricity and fuel prices.

Eggs may again rise in price to 70-75 hryvnias per dozen. Such a price increase should be expected already in autumn. Such a forecast is associated with an increase in the prices of feed, medicines, electricity, etc.

In addition, the markets are currently seeing price drops for aubergines, zucchini, beets, carrots, cabbage, potatoes and peppers. At the same time, the prices of lemons, blueberries and bananas fell. 

In the second week of July 2023, a sharp drop in raspberry prices was observed in Ukraine. The price of this berry, according to gardeners, varies between 35-60 hryvnias per kilogram. Compared to the end of last week, it is 27% cheaper.

According to EastFruit, the average price of raspberries in Ukraine is now 60% lower than in the same period last year, analysts say. The main reason for the drop in prices is a sharp increase in the supply of raspberries on the market, with the demand for these berries unchanged.

According to "APK-Inform" prices of some vegetables in the markets of two large cities of Ukraine have fallen significantly. For example, in Lviv "Shuvar" eggplant prices have fallen by 29% and amount to 50 hryvnias per kilogram. The most expensive zucchini, cabbage, broccoli and sweet pepper - respectively by 60% (currently 8-10 UAH per kg), 50% (25-35 UAH per kg) and 35% (75-100 UAH per kg) . The prices of lemons, bananas and blueberries also fell. At the "Shuvar" market, these fruits and berries became cheaper by 40%, 17% and 12%, respectively.

Also, the Ministry of Economy and Trade of Ukraine has developed a new project that can change the prices of alcoholic beverages. According to this draft, the prices of certain types of alcohol may increase. 

The current prices of alcoholic beverages were set in 2018, but do not take into account the current economic conditions and the tax system. Therefore, the Ministry of Economy proposed to raise the minimum prices for some alcohols, such as vodka, whiskey, rum, gin and cognac.


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