A significant driver of price growth and the main reason for the deviation of price dynamics from the National Bank's forecast remained temporary factors, primarily the rapid increase in food prices due to lower harvests.
This is stated in the National Bank's message, Ukrainian News Agency reports.
In December 2024, inflation accelerated to 12.0% in annual terms.
In monthly terms, prices increased by 1.4%.
Actual consumer inflation in December 2024 was higher than the National Bank's forecast published in the Inflation Report for October 2024.
On the one hand, the main driver of price growth and the main reason for the deviation of price dynamics from the forecast remained temporary factors, primarily the rapid increase in food prices due to lower harvests.
On the other hand, fundamental price pressure also increased significantly against the background of a further increase in business costs for energy supply and labor.
The effects of the weakening hryvnia exchange rate also had a certain impact.
Raw food prices rose by 13.2% in 2024.
In December, the growth in prices for raw products slowed down in annual terms compared to November.
Thus, prices for chicken and eggs grew somewhat more slowly against the background of an expansion in supply, in particular due to warming.
Prices for vegetables and fruits grew somewhat more slowly due to increased imports. In contrast, the growth in prices for flour, cereals and milk accelerated under the influence of an increase in the cost of raw materials and production costs.
And the decline in prices for sugar and pork slowed down.
Prices for non-food products increased by 4.1% y/y in 2024, primarily under the influence of the exchange rate factor in previous periods.
However, prices for clothing and footwear remained lower than last year.
The growth rate of the cost of services in 2024 amounted to 12.5%, accelerating in December compared to November.
Thus, the prices of healthcare services, transport services, including the operation of own vehicles, communication services, recreation and culture, restaurants and hotels, personal care, insurance, and financial services rose faster.
In December 2024, the prices of tobacco products rose faster, probably due to the fact that manufacturers and importers raised prices in advance in view of the expected increase in excise duties in 2025.
Prices for certain alcoholic products also increased due to the increase in the excise tax rate for intermediate alcoholic products and the minimum wholesale and retail prices for wine products since December.
The dynamics of prices for excisable products were also affected by exchange rate effects and measures to combat shadow supply.
The growth of prices for pharmaceutical products, medical goods and equipment also accelerated.
At the same time, the moratorium on increasing tariffs for housing and communal services for the population continued to restrain administrative inflation.
Inflation is likely to continue to grow in the first months of 2025 due to the continued impact of both temporary factors, in particular the effects of lower harvests, and fundamental factors, in particular pressure from business costs for energy supply and labor remuneration, as well as the effects of the weakening hryvnia exchange rate.
At the same time, the NBU expects inflation to return to a steady downward trajectory in the second half of 2025 and move towards the NBU’s target of 5% over the policy horizon.
The reduction in inflation will be facilitated, in particular, by the National Bank’s interest rate and exchange rate policy measures, as well as higher yields, an improvement in the energy sector, a reduction in the fiscal deficit, and moderate external price pressure.
As Ukrainian News Agency earlier reported, consumer prices increased by 12.0% in 2024.
Inflation in December was 1.4%.
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