Actual price growth rates were significantly lower than NBU forecast

The actual rate of price growth was substantially lower than the National Bank forecast published in the April 2023 Inflation Report.

This is evidenced by the data of the NBU, Ukrainian News Agency reports.

In June 2023, consumer inflation slowed year-on-year (YoY) further, to 12.8% from 15.3% in May.

On a monthly basis, prices rose 0.8%.

The slowdown in inflation was due to a greater supply of food and fuel, a decrease in world prices in commodity markets, as well as an improvement in inflation and exchange rate expectations against the backdrop of a steady situation in the cash foreign exchange market.

The rise in price of processed food products continued to slow rapidly (up to 14.7% YoY).

Such dynamics primarily reflected a decrease in pressure on business expenses, in particular on logistics, as well as raw materials and energy, given their sufficient supply.

In particular, prices for bread and bread products increased more slowly.

In addition, against the backdrop of declining world prices and weak demand, as well as uncertainty about limiting exports to neighboring EU countries, dairy products became more expensive at a lower rate, and sunflowerseed oil fell in price year-on-year.

Exchange stability contributed to a decrease in the growth rate of prices for products that have a significant share of imports in cost, in particular for fish products.

The increase in prices for most non-food goods also slowed (to 12.2%) under the influence of improving inflation and exchange rate expectations against the background of the favorable situation in the foreign exchange market.

As a result, prices for furniture, household appliances, utensils, clothing and shoes, cars, electronics and personal care products were rising at a lower rate.

The growth rate of cost of services also decreased (to 14.2% YoY).

The services of cafes and restaurants, medical institutions, beauty salons and veterinary clinics were slower to rise in price.

This is due to a decrease in pressure on business expenses, as well as a stable situation in the foreign exchange market.

Instead, the rise in price of hotel services, telecommunications, financial and insurance companies has accelerated, which may, in particular, be explained by the reflection of previously incurred costs, as well as the gradual recovery in demand.

Milk, pork and chicken became more expensive due to restrained demand, and eggs due to increased supply.

Against the background of low export prices and sufficient grain stocks, prices for cereals and flour increased more slowly.

In addition, the rise in price of sugar has slowed due to a decrease in world prices and sufficient supply in the domestic market.

Due to the sufficient supply and stable situation in the foreign exchange market, prices for vegetables and fruits increased more slowly.

As Ukrainian News Agency earlier reported, in June 2023 consumer prices increased by 0.8%.

In January-June 2023, inflation was 4.6%.