NBU names main reasons for slowdown in inflation in January

The National Bank has named the main reasons for the slowdown in inflation in January.

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

Disinflationary dynamics was due to a decrease in imbalances in the labor market, the persistence of secondary effects from last year's high harvests and increased competition from certain imported products (in particular, meat and dairy). As a result of these factors, the growth rate of prices for processed goods and services declined somewhat faster than expected. At the same time, the deceleration in the growth of administratively regulated prices was not as rapid as the NBU had forecast. In addition, there were signs of increased price pressure from raw foods.

The annual growth rate of raw food prices accelerated to 8.2% year-on-year.

In January, the growth in raw food prices accelerated year-on-year for the first time since June 2025. This was primarily driven by a rise in the price of eggs due to the effect of the previous year's comparison base (warm weather in January 2025 increased supply), cucumbers amid limited supply, tomatoes due to the rising cost of imported products, and an acceleration in the price of fish and citrus fruits. At the same time, a slowdown in the growth of prices for pork, beef, chicken, and flour helped ease price pressures.

Core inflation continued to decline to 7.0% year-on-year.

The growth in prices for processed food products continued to slow down to 10.8% year-on-year, in particular due to the slowdown in the growth of prices for bread, sunflower oil, soft drinks, butter, and cheeses.

Services inflation slowed to 11.2% year-on-year, in part due to a gradual decline in pressure from the labor market. As a result, the growth rate of prices for insurance and financial services, communication services, hospitals, transportation services and operation of personal vehicles, personal care services, out-of-home dining, and temporary accommodation decreased.

For the first time since May 2024, the decline in prices for non-food products has resumed (-0.4% year-on-year).

The growth rate of administratively regulated prices slowed to 9.1% year-on-year.

The slowdown in administrative inflation in January was primarily due to a slowdown in the growth of prices for alcoholic beverages and tobacco products.

Fuel inflation slowed down to 5.7% year-on-year.

This dynamics primarily reflected the effect of the previous year's comparison base for gasoline and diesel fuel. At the same time, the rate of rise in the price of automotive gas accelerated both as stocks were depleted and due to rising costs as a result of the cold snap.

In the coming months, inflation is expected to decelerate further, but at a slower pace, including due to the effects of large-scale disruptions in the energy sector. The NBU's monetary policy will help limit underlying price pressures to bring inflation back to its policy horizon target

As the Ukrainian News agency earlier reported, in January 2026, inflation continued to slow down to 7.4% year-on-year. Month-on-month, prices grew by 0.7%.

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