Analysts from the investment company ICU noted that annual inflation in Ukraine reached 11.9% in September, a significant decrease compared to 13.2% in August and a peak of 15.9% in May. Moreover, this level of inflation at the end of September turned out to be lower than the July forecast of the National Bank of Ukraine, which anticipated 13.1%. The main reason for the slowdown in the inflation rate is the decrease in prices for most consumer goods, except for the education, hotel, and restaurant sectors. The most noticeable contribution to disinflation came from food products, which was made possible by a high harvest of vegetables and fruits.
This is reported by Business • Media
Favorable conditions for lowering rates
According to experts, there are currently no significant risks that could alter the disinflation trend. In particular, household income growth remains moderate due to a slight increase in social benefits and salaries in the public sector. Additionally, administratively set tariffs for gas and electricity for the population are likely to remain unchanged for at least the next year. This year’s favorable harvest also ensures a sufficient supply of food products in the market.
Forecast for further easing of monetary policy
“We expect the trend of slowing inflation to continue and foresee it at 8.5% by the end of 2025. This allows the NBU to begin a cycle of gradual easing of monetary policy as early as October this year – we expect a reduction in the discount rate next week by 50 basis points,”
– stated the analysts at ICU in their forecast. Thus, the current macroeconomic situation creates the prerequisites for the gradual reduction of the discount rate by the National Bank of Ukraine as early as October.