Price growth on a monthly basis reached 0.6%. These rates exceeded expectations laid out in July’s inflation report.
In August 2024, consumer inflation in Ukraine rose to 7.5% year-on-year, a notable acceleration from 5.4% in July. The National Bank announced this in a commentary on the inflation rate in August 2024.
Price growth on a monthly basis reached 0.6%. These rates exceeded expectations laid out in July’s inflation report.
The main factors that led to the acceleration of inflation were the worst harvest this year, increasing business costs for food raw materials, energy and labor costs. These factors have put additional pressure on prices, especially for food and staples.
Core inflation and food products
Core inflation rose to 6.5% y/y in August compared to 5.7% in July. Processed food price growth accelerated to 7.4% YoY, driven by higher raw material and input costs. A significant increase in prices was observed in bakery and confectionery products due to the influence of dry weather conditions and increased costs of raw materials.
Dairy products have become increasingly expensive due to the limited supply of raw materials and increased demand from milk processing enterprises. There was also an increase in prices for vegetables, in particular, tomatoes, cucumbers and other borscht products, associated with a decrease in harvest and market supply.
Effects of depreciation and business expenses
One of the main factors influencing inflation is the weakening of the hryvnia exchange rate, which has continued in recent months. This increases the cost of imported goods, including coffee, tea and pharmaceuticals. In addition, business costs for labor and energy continued to rise, pushing prices higher.
Administratively controlled prices
The growth of administratively controlled prices also accelerated to 13.7% y/y. This is especially true for tobacco products, pharmaceutical products and alcoholic beverages. However, inflation continues to be affected by the moratorium on increasing tariffs for some housing and communal services, which to some extent restrains price growth.
Forecast for the coming months
Inflation pressures are expected to remain high in the coming months due to rising business costs and gradual increases in excise taxes. However, the National Bank of Ukraine assures that it will continue to direct monetary policy to keep inflation at a moderate level and return it to 5% in the medium term.
These measures include supporting the stability of the foreign exchange market and protecting hryvnia income and household savings from inflationary pressure.
We remind you that in August, consumer prices in Ukraine increased by 0.6% after dropping to zero in July.
This July, the NBU worsened its inflation forecast in 2024 to 8.5%. The regulator expects overall inflation in the country to accelerate over the next three quarters but remain moderate.
As you know, by the end of 2023, inflation in Ukraine will reach 5.1%. This is the lowest level since 2020, when consumer price growth was 5%.
New Correspondent.net on Telegram and WhatsApp. Subscribe to our channels Athletistic and WhatsApp
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.