Economy 2024-05-15T06:51:57+03:00
Ukrainian news
NBU: Inflation Will Remain Unchanged Over 10% In Q3 Year Over Year, Will Slow Down Late In 2021

NBU: Inflation Will Remain Unchanged Over 10% In Q3 Year Over Year, Will Slow Down Late In 2021

National Bank, NBU, inflation, consumer inflation

The National Bank of Ukraine expects that in the third quarter of 2021 the inflation will remain above 10% year over year and will slow down late in 2021.

That follows from a statement by the NBU, Ukrainian News Agency reports.

According to the report, in July 2021, consumer inflation speeded up year over year to 10.2% from 9.5% in June.

At the same time, the prices rose by 0.1% month over month.

The central bank notes that the consumer inflation met the outlook trajectory posted in the inflation report for July 2021.

The basic inflation in July remained at the level of the previous month (7.3%).

An increase in the cost of services speeded up to 8.2% year over year.

It was also affected by stable consumer demand and growth in production expenditures.

Services of public catering, cultural establishments, hospitals, taxis, repairs, and rent grew most considerably.

On the other hand, the rise in prices for tourist services has slowed down due to an increase in the supply of foreign vacations.

As a result of a sharp decline in morbidity and a favorable situation in the foreign exchange market, the growth in prices for non-food products slowed down (to 1.2% year over year).

In particular, pharmaceuticals and medical products, detergents and cars rose in price more slowly, while clothing and footwear, home textiles fell even more in price.

At the same time, the cost of electronics, personal care products, furniture, and utensils grew faster, driven by strong consumer demand.

Egg prices grew at a faster rate, primarily due to the rise in feed prices.

Hot weather could be an additional factor in the rise in egg prices.

The cost of milk and meat also increased due to higher costs for feed, energy, and a decrease in supply, given the decline in livestock production.

Subsequently, sugar rose in price due to high global prices and a lower sugar beet crop compared to last year.

It is noted that administratively regulated prices increased (up to 18.5% year over year).

On the one hand, the rise in prices for alcoholic beverages has accelerated, primarily due to beer and sparkling wines.

There was an increase in the cost of transport services due to an increase in fuel and labor costs.

It is indicated that against the background of further recovery of air traffic and significant demand for it, air carriers have increased tariffs for their services, compensating for significant losses during downtime.

The growth of tariffs for local telephone communications has also accelerated.

On the other hand, the growth in the cost of natural gas slowed down somewhat, primarily due to the effect of the comparison base.

Thus, despite the rapid rise in gas prices in Europe in July, the cost of gas for Ukrainian households increased by 3.3% due to the possibility of concluding annual contracts.

"During the third quarter, inflation will remain above 10% year over year, but will slow down at the end of the year," it was reported.

It is predicted that by the end of 2021 inflation will be 9.6% year over year and will return to the National Bank's target of 5% year over year in the second half of 2022.

The slowdown in inflation will be facilitated by the arrival of a new crop on the markets, adjustments in global prices for energy and food, as well as the tightening of the National Bank's monetary policy, in particular, an increase in the discount rate and curtailment of anti-crisis monetary measures.

As Ukrainian News Agency earlier reported, in July 2021, consumer prices rose by 0.1%.

In January-July, the inflation was 6.5%.

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