The NBU told when the inflation rate will decrease
25 December 2024 15:47
High inflation in Ukraine will continue until mid-2025. This is stated in the Financial Stability Report for December 2024 of the National Bank of Ukraine, "Komersant Ukrainian" reports.
The report says that inflation accelerated at the end of the year, exceeding the NBU’s forecast. This is primarily due to higher food prices due to poor harvests, as well as to a certain extent higher electricity costs, higher business labor costs, and the weakening of the hryvnia during the year.
Inflationary pressures will ease in the middle of next year as new crops enter the market.
In December, the National Bank raised its key policy rate by 0.5 percentage points to 13.5% to avoid unbalancing inflation expectations. The financial institution says that the tightening of monetary conditions will stop the decline in commercial bank rates that has been going on for more than a year.
Inflation is likely to remain at a double-digit level in the first half of next year. Inflationary pressures from rising food prices are expected to ease after the new harvest arrives on the market. The effects of the high comparison base in 2024, the resilience of the energy sector, and the expected decline in energy prices on the global market will also contribute to the decline in inflation.
At the same time, rising production costs, primarily labor costs due to higher wages and a shortage of staff, will continue to put pressure on prices. According to the NBU’s forecast, inflation will return to the 5% target only in 2026.
