Prices in Ukraine are growing faster than the NBU predicted

Prices in Ukraine are rising faster than the National Bank of Ukraine had predicted.

By the end of the year, inflation may reach 10%, according to the NBU's inflation commentary.

In October 2024, prices in Ukraine continued to rise: overall inflation reached 9.7% compared to October last year (against 8.6% in September). Over the month, prices rose by 1.8%, according to the State Statistics Service. The price increase was faster than the National Bank had predicted, due to a sharp rise in food prices due to unfavorable weather conditions. This reduced yields, and prices for vegetables, fruits, and other products continued to rise.

Prices for processed foods, such as bread, meat, and dairy products, also rose as producers' costs for raw materials, energy, and wages increased. In addition, imported goods, such as coffee and chocolate, also rose in price as the hryvnia depreciated in previous months.

Administratively regulated prices also increased slightly, to 14.5% on an annualized basis, due to higher prices for alcohol and tobacco. However, the growth in utility tariffs remains under a moratorium, restraining inflationary pressures.

TheNBU predicts that inflation may reach 10% earlier than expected due to a reduced supply of certain goods, higher costs, and a shortage of electricity during the heating season. At the same time, the NBU expects inflation to start declining in 2025. At the end of 2025, it will reach 6.9% and will continue to move towards the NBU's target of 5%. This will be facilitated by the NBU's interest rate and exchange rate policies, as well as by an increase in food supply and an easing of external price pressure.

Meanwhile, the Government approved the draft State Budget for 2025, which provides for significant investments in the production of weapons and military equipment - more than UAH 55 billion.