Actual rates of price growth exceed trajectory of NBU forecast

Actual rates of price growth accelerated as expected, but exceeded the trajectory of the forecast published in the October 2024 Inflation Report.

This is stated in the message of the National Bank of Ukraine (NBU), Ukrainian News Agency reports.

One of the main factors behind the deviation from the forecast trajectory was the faster acceleration of food inflation due to the more significant than expected impact of adverse weather conditions on agricultural crops and, accordingly, a smaller supply of food products.

Administratively regulated prices and fuel prices also rose somewhat faster than expected.

Underlying inflationary pressures also strengthened more than forecast. Thus, the core inflation index rose to 8.3% in October from 7.3% in September.

Such dynamics were caused primarily by a faster increase in the price of processed food products under the influence of higher costs of food raw materials, as well as further growth in business expenses for electricity and labor.

The growth of prices for raw food products accelerated significantly - to 10.5% y/y.

The hot, rainless weather in the summer and early autumn this year affected yields, ripening times and quality parameters of a number of vegetables and fruits, which was reflected in their supply.

In particular, the prices of vegetables from the borscht set and most fruits rose faster.

The prices of tomatoes and cucumbers also remained higher than last year, although the rate of their price increase slowed down in October.

The increase in the cost of raw materials, feed and production costs, including energy, affected the prices of flour, cereals, milk and meat.

These same factors probably also influenced the fact that the annual price reduction of eggs slowed down significantly.

Instead, the decline in sugar prices accelerated due to the active processing of sugar beet of the new crop.

The rate of growth of administratively regulated prices accelerated slightly - to 14.5% y/y.

Alcoholic and tobacco products became more expensive, including under the influence of the weakening of the hryvnia in previous months and the fight against shady products.

The growth of prices for pharmaceutical products, medical goods and equipment accelerated.

As before, administrative inflation was restrained by a moratorium on tariff increases for certain housing and communal services for the population.

The increase in fuel prices slowed down sharply - to 3.2% y/y.

The offer on the fuel market continued to be significant, despite the short-term increase in the price of raw materials in the first half of October.

As Ukrainian News Agency earlier reported, in October 2024, consumer prices rose by 1.8%.

In January-October 2024, inflation was 8.4%.