The difficult situation in the energy sector and the state budget will lead to a gradual increase in tariffs in the coming years.
The National Bank of Ukraine predicts that some tariffs for housing and communal services (gas, heating and hot water supply) will remain unchanged during 2024. However, the difficult situation in the energy sector and the state budget will likely lead to gradual tariff adjustments in the coming years. This is discussed in the NBU Inflation Report.
“It is expected that from 2025 a gradual reduction of tariffs to their economically reasonable levels will begin,” the forecast said.
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It was noted that uncertainty in the timing and magnitude of tariff adjustments, mainly energy tariffs, is a particular risk for the inflation forecast.
In particular, a significant increase in energy costs to quickly eliminate imbalances in the energy sector will be a source of additional inflationary pressure and will require a significant increase in subsidies for the population.
On the other hand, a longer delay in decisions on bringing tariffs for housing and communal services in line with economically reasonable levels will lead to lower levels of inflation, but will accumulate quasi-fiscal imbalances and worsen the financial situation of state-owned energy. companies.
According to the NBU, this will aggravate the risks of instability in the energy market, worsen the investment potential of the industry, and the price pressure will only be postponed in the future.
“The moratorium on the increase of certain tariffs for housing and communal services for the population will limit the growth of administrative prices for some time, however, their gradual bringing to market levels, which, according to assumptions, will start in 2025, will be a significant pro-inflationary factor in 2025-2026,” said the NBU report.
We remind you that from June 1, 2023, the Cabinet of Ministers increased the electricity tariff for the population from 1.68 UAH/kWh to 2.64 UAH/kWh. From June 1, 2024, the electricity tariff for the population in Ukraine has increased to 4.32 UAH/kWh.
As reported, prices in Ukraine rose significantly in June. The increase in prices throughout the month is mainly due to the increase in electricity tariffs.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.