Actual rates of price growth were significantly lower than trajectory of NBU's forecast

The actual rates of price growth were significantly lower than the trajectory of the National Bank's forecast.

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

In August 2023, consumer inflation in annual terms (y/y) slowed down sharply - to 8.6% from 11.3% in July.

In monthly terms, deflation was recorded for the second month in a row - prices decreased by 1.4%.

A faster slowdown in inflation was caused primarily by a greater supply of raw food products, in particular vegetables and fruits of the new harvest.

Vegetables became cheaper by 25.7% y/y thanks to the expansion of supply.

In annual terms, the prices of all vegetables in the consumer set, as well as some fruits and watermelons, decreased.

The production of vegetables and watermelons increased thanks to favorable weather conditions and increased production volumes in certain regions.

Cereal and flour prices continued to fall against the backdrop of low export prices and increased production.

The more moderate increase in the price of eggs reflected the effects of the comparison base, while their prices did not change during the month due to the increase in their export.

Growth in meat prices has moderated, although prices remain high due to tight supply and rising energy and fuel costs.

The increase in the price of alcoholic beverages slowed down due to slower growth in production costs against the background of pressure from the shadow supply.

Also, the slowdown in the growth of prices for transport services continued due to lower than last year fuel prices in the previous months.

The moratorium on raising a number of tariffs for housing and utility services for the population continued to restrain administrative inflation.

Fuel prices continued to rise in August compared to July due to the return of full taxation.

However, lower global oil prices in previous months, significant fuel inventories and increased competition in the retail market were the restraining factors for fuel price growth.

The increase in the price of processed food products continued to slow down (to 12.5% y/y).

Such dynamics are due to the further reduction of pressure from the side of business costs, optimization of production and logistics chains, as well as improvement of inflation and exchange rate expectations.

Thus, the growth of prices for meat and dairy products, bread and flour products slowed down.

Exchange rate stability contributed to a decrease in the rate of growth of prices for products that have a significant share of imports in the cost price, in particular fish products, coffee, tea, juices, candies, dried fruits, spices.

The fall in sunflowerseed oil prices deepened due to lower foreign prices and export difficulties.

This led to a slowdown in the growth of prices for the products of its processing.

The growth of prices for non-food goods also slowed significantly (to 5.5%) due to improved inflation and exchange rate expectations.

As a result, prices for personal care products, toys, furniture, household appliances, household goods, and cars rose at a slower rate.

And the prices of electronics, clothes and shoes even decreased in annual terms.

The general downward trend in inflation will continue.

Among other things, this will be facilitated by the effects of better harvests, the fixing of individual tariffs for housing and utility services, as well as the consistent monetary policy of the National Bank.

Inflation at the end of the year will probably be lower than the NBU's July forecast, although the potential for its rapid slowdown is almost exhausted.

As Ukrainian News Agency earlier reported, in August 2023, consumer prices decreased by 1.4%.

In January-August 2023, inflation was 2.5%.