Rising prices for excisable products and fuel had key impact on inflation in February - NBU

The National Bank of Ukraine (NBU) reported that in February, the key impact on inflation was the rise in prices for excisable products and fuel.

This is stated in the NBU report, Ukrainian News Agency reports.

In February 2025, inflation accelerated to 13.4% in annual terms.

In monthly terms, prices increased by 0.8%.

The dynamics of consumer inflation was close to the trajectory of the National Bank's forecast, published in the Inflation Report for January 2025.

At the same time, core inflation continued to exceed expectations due to further growth in business costs, in particular for labor costs.

Raw food prices rose by 13.0%.

Thus, prices for fruits, some livestock products, flour and cereals rose faster under the influence of the continuing effects of last year's low harvests.

Prices for pork, chicken and sugar approached the prices of trading partner countries against the background of stable exports.

At the same time, the rise in prices for vegetables slowed down somewhat due to the expansion of supply due to imports, the arrival of a new greenhouse crop and a decrease in demand for certain items.

Core inflation increased to 12.0%.

The rise in prices for processed food products accelerated to 16.7% y/y in February.

Such dynamics is explained, as before, by the rise in prices for food raw materials, as well as an increase in enterprises' costs for electricity, labor and logistics.

As a result, the prices of bread and certain bread products, oil, meat and dairy products rose at a high rate.

Due to rising prices on world markets, some imported goods, in particular cheeses, tea, coffee and chocolate, became more expensive.

Prices for non-food goods slightly accelerated growth to 4.4% y/y. At the same time, prices for clothing and footwear remained lower than last year.

The growth rate of the cost of services also slightly accelerated and amounted to 14.3% y/y.

Compared to January, the cost of healthcare, transport services, communications, recreation and culture services increased.

In contrast, personal care services, insurance and financial services increased more slowly.

Administratively regulated prices increased by 18.1%.

In February, the cost of excisable products grew faster due to a further increase in production costs, as well as price adjustments due to the strengthening of measures to combat shadow supply and the likely impact of the expected test implementation of E-excise.

Pressure from production costs led to an increase in prices for pharmaceutical products, medical goods and equipment.

At the same time, a moratorium on tariff increases for certain housing and communal services for the population continued to restrain administrative inflation.

The growth rate of fuel prices was 13.9%.

In February, fuel price growth accelerated compared to January, primarily due to the high rate of increase in the cost of LPG.

At the same time, a surplus of gasoline supply, competition in the gas station market and optimization of the logistics of imported supplies restrained the increase in fuel prices.

As Ukrainian News Agency earlier reported, inflation will increase in the coming months due to the continued impact of last year's poor harvests and an increase in enterprises' production costs for energy supply and labor costs.

However, in the second half of the year, it should return to a slowdown trajectory due to the measures taken by the NBU to strengthen monetary policy and the gradual exhaustion of the impact of temporary factors.

Inflation is expected to decline to single-digit levels by the end of the year and continue to move towards the 5% target over the policy horizon.