Food prices will not continue to rise indefinitely; a ceiling has already been set for the majority of products.
Despite the government’s forecasts that price growth will hardly slow in 2023, and inflation, according to the year’s results, will reach 28% and lead to a price increase, “ANTS” analyst Ilya Neskhodovskyi is confident that there will be no catastrophic increase in product prices.
Food will not continue to become more expensive indefinitely, but it will reach a price ceiling at some point. It will be determined by Ukrainians’ purchasing power and the cost of imports that can replace domestic products. For example, fish, which has already increased in price by 40% this year, has reached its price limit. The same as eggs.
“Our ceiling has actually already been formed for most products,” – says Ilya Neshodoskyi, head of the analytical department of the National Interests Advocacy Network “ANTS”.
The analyst also disagrees with the government’s forecast of a UAH 42 average annual exchange rate for the dollar. It is worth noting that the budget was created using such a forecast. Ilya Neskhodovskyi, on the other hand, believes that the hryvnia will not only not fall, but may even strengthen.
According to the expert: “The budget has a significant 38 billion dollar deficit. External borrowing, in both dollars and euros, will be the primary source of repayment for this budget deficit. This means they’ll enter the foreign exchange market and put downward pressure on the exchange rate. There are no factors pushing the hryvnia to weaken, but there are those pushing it to strengthen. As a result, the government’s forecast of 28% inflation is overly pessimistic, because the economy has already adapted to life in wartime conditions”.
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