Actual Price Growth Rates Were Lower Than NBU Forecast Trajectory

Actual price growth rates were below the National Bank's forecast trajectory.

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

In May 2023, consumer inflation slowed year-on-year (YoY) further, to 15.3% from 17.9% in April.

On a monthly basis, prices rose 0.5%.

Actual price growth rates were below the trajectory of the National Bank forecast published in the April 2023 Inflation Report.

Inflation was restrained by sufficient supply of food and fuel, strengthening of the hryvnia in the cash foreign exchange market, improving inflation and exchange rate expectations.

The slowdown in inflation is also largely attributed to the effect of the comparison base.

The rise in price of processed food products slowed significantly (to 17.1% YoY).

This is due to a further decrease in the growth rate of raw material and energy costs, as well as the restoration of production and logistics chains.

Prices for bread and flour products, confectionery, drinks and canned food increased more slowly.

The health of dairy products and sunflower oil has slowed due to a decline in global prices amid weak demand, as well as uncertainty associated with the restriction of food transit through neighboring EU countries.

The improvement in exchange rate expectations against the background of the strengthening of the hryvnia cash rate contributed to a decrease in the growth rate of prices for imported products.

Non-food price growth also slowed (to 14.5% YoY).

Thanks to the effects of the comparison base and the improvement of inflation and exchange rate expectations, prices for personal care goods, clothes and shoes, electronics, toys, furniture, household appliances, household goods, cars increased more slowly.

The growth rate of service costs decreased (to 14.6% YoY).

Fuel prices decreased by 1.4% YoY (compared to an increase of 24.2% YoY in April).

This is primarily due to the presence of significant reserves, a decrease in world oil prices, increased competition and a high comparison base.

Inflation continues to slow due to the predominance of food supply over demand, significant fuel reserves, as well as improving inflation and exchange rate expectations against the background of the strengthening of the hryvnia exchange rate.

As Ukrainian News Agency earlier reported, in May 2023 consumer prices increased by 0.5%.

In January-May 2023, inflation was 3.8%.