Inflation slowed down in Ukraine

Consumer inflation in Ukraine slowed down. Yes, it was laid at the level of 26%, as a result the figure is 24.9%. The National Bank reported that the actual figures were lower than the forecast due to a larger-than-expected supply of food. There is also enough fuel on the market and the energy situation has stabilized. Inflation is also restrained by the favorable situation in the cash segment of the foreign exchange market.

Ilya Neskhodovskyi, head of the analytical department of the National Interests Advocacy Network “ANTS”, confirmed that a number of reasons contributed to the slowdown in inflation:

“The first is the situation on the currency market. We see that now the exchange rate is UAH 37–37.5 per dollar. This is a positive moment, because a few months ago this figure was UAH 41 per dollar. In addition, the situation on the energy markets – the price of oil and gas is falling. Another factor is that inflation has decreased in Europe as well, says Ilya Neskhodovskyi.

According to him, the change in the policy of the Ministry of Finance had a positive effect on the situation.

“We are talking about how the budget deficit is covered. If in the previous year we mainly covered the budget deficit through issuance: the National Bank bought bonds of domestic state loans and thus financed our needs. It is planned to receive funds from external partners this year. As a result, we do not have an excess supply of hryvnias to the market. Plus, the situation on the energy market is stabilizing, accordingly, producers have the opportunity to work calmly and fulfill production plans.”

The expert emphasizes that there is a significant price increase for some products, but if, for example, we take the situation with onion prices, then this is a global trend.

“This is not so much a Ukrainian story as a global one, because failed harvests in certain territories of Asia led to an increase in onion prices in the world, including in Ukraine. But if we take the average inflation, then we have a pleasant trend of slowing down. Of course, prices will not roll back, because we are in a state of war. In addition, although the price of gasoline has stabilized, it is still high and this is a certain challenge. In addition, the dollar changed course. Last year it cost 28 hryvnias, and now – 37.5 hryvnias. However, the trends are positive for us and we will expect greater stabilization,” says the head of the analytical department of the ANTS network.

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