The head of the National Bank of Ukraine, Andriy Pyshny, reported that inflation in the country has already reached its peak for this year in May and began to decline in June. By the end of June, this figure was 14.3% year-on-year, which is slightly higher than experts’ expectations. The main factors for the forecast exceeding were adverse weather conditions that affected the supply of food products.
This is reported by Business • Media
“Inflation reached its expected peak in May and returned to a decline in June, standing at 14.3% year-on-year. At the same time, it was higher than anticipated, primarily due to the impact of adverse weather conditions on the supply of food products. In contrast, the slowdown in core inflation to 12.1% was somewhat faster than forecasted.”
Inflation forecasts for the coming months
According to the National Bank’s estimates, the further dynamics of inflation in the coming months will largely depend on the impact of weather conditions on the harvest and prices for agricultural products. In July, overall inflation may temporarily rise; however, core inflation is expected to continue its downward trend. The head of the NBU noted that the inflation process in Ukraine is gradually transitioning to a trajectory of sustainable slowing.
Updated long-term inflation forecast
Despite this, the National Bank has revised the projected trajectory of inflation towards a slower decline. This was influenced by greater economic losses due to the war, rising business costs, deteriorating harvest prospects, and the weakening of the hryvnia against the euro. According to the updated forecast, inflation will slow to 9.7% in 2025 (previously expected at 8.7%), to 6.6% in 2026 (previous forecast – 5%), and the target of 5% may be achieved in 2027.