Deflation for the second month in a row: what lower prices mean for Ukraine’s economy
10 September 2025 18:26
Deflation – a drop in consumer prices – has been recorded in Ukraine for the second month in a row. Such dynamics is atypical for wartime, when the economy operates under the pressure of high costs and logistical risks. This is reported by the State Statistics Committee, reports "Komersant Ukrainian".
On the one hand, it makes life easier for consumers, but on the other hand, it raises the question whether it is only a seasonal phenomenon or a deeper trend in the economy.
Key data from Gosstat
- In August 2025, consumer prices decreased by 0.2% compared to July.
- On an annualized basis, inflation slowed to 13.2% (it was 14.1% in July).
- Core inflation was 0.5% in August (annualized at 11.4%).
What got cheaper
- Vegetables – by 12.7%;
- Fruit – by 10.2%;
- Rice – by 1.5%;
- Sugar – by 1%.
Such a drop in prices is primarily due to seasonal factors – harvest period.
What went up in price
- Lard, eggs, meat and meat products, fish, milk, bread, cheese, butter – from 0.4% to 4.5%.
- Alcohol and tobacco – 0.8% (due to a 2% rise in the price of tobacco products).
- Communication services – 2.7% (due to a 4.7% increase in tariffs for mobile communications).
What affects inflation in annual terms
- Food products rose in price by 20.5% over the year;
- Alcohol and tobacco – by 19.2%.
These two groups remain the key drivers of annual inflation.
Other changes
- Clothing and footwear fell in price by 3.2% in August (footwear by 3.9%, clothing by 2.7%).
Ukraine is experiencing its second consecutive month of deflation. In July, prices also fell by 0.2%.
The decline in consumer prices is observed against the backdrop of continued high annual inflation rates (over 13%) and expectations of further adjustment of monetary policy. The National Bank previously forecasted a gradual slowdown in inflation in the second half of 2025 due to seasonal factors and tight monetary policy.
Two consecutive months of deflation signaled seasonal cheapening of products and some relief for consumers. At the same time, high annual rates demonstrate that price pressures persist in the medium term, especially for food and services.
