Inflation in Ukraine Hits Two-Year Record: National Bank Gives Unexpected Forecast

According to State Statistics, inflation in Ukraine reached a two-year record of 15.9% in May. The main reason for the price increase remains food, where prices have risen by 22.1% over the year.

The NBU explained the acceleration in May by the 'rapid rise in raw material prices due to adverse weather conditions this spring and active food exports.'

According to expressed opinions, Ukrainian families' food expenditures exceed those of Polish families, even with certain products that are already more expensive here than with neighbors. The NBU suggests that May marked a high peak of inflation and will not lead to further price increases. It is forecasted that by the end of the year, inflation will decrease to 8.7%. The rating growth of prices occurred due to the low base of the previous year. A price increase is already expected in June, while the overall annual inflation indicator should decline. Hopes for a summer decline in inflation hinge on improvements in the energy sector, falling oil prices, a strict monetary policy, and a successful new harvest. Currently, there are no plans to raise electricity tariffs, and gas prices remain the same. Forecasts for future harvests and the economic situation in autumn remain uncertain and require careful monitoring.