The National Bank of Ukraine notes that the peak of inflation in Ukraine was passed in September, and from October it began to decline.
The NBU has said this in a statement, Ukrainian News Agency reports.
In 2021, inflation was expected to be above the target range of 5% ± 1 p.p. determined by the Basic Principles of Monetary Policy, but deviated from it more significantly than it was forecast.
Actual consumer inflation in December 2021 remained above the forecast published in the October Inflation Report.
This was primarily due to the increased influence of the secondary effects from the rise in energy prices and other production costs on a wide range of goods and services.
In addition, the rapid slowdown in inflation at the end of the year constrained the increase in military tensions on the borders with Russia, which negatively affected the expectations of the population, business, and investors.
The acceleration in inflation in 2021 was a global trend driven primarily by the rapid recovery in economic activity following the coronavirus crisis amid supply chain disruptions associated with quarantine restrictions.
This, in particular, led to an increase in the cost of energy carriers, raw materials, and components.
The additional burden on prices has also led to increased emissions abatement measures.
On the other hand, domestic factors also fueled inflation in Ukraine.
Among them, there was stable consumer demand due to the growth of incomes of the population and improved consumer sentiment, as well as an increase in production costs, in particular for wages.
Despite this, the peak of inflation in Ukraine was passed in September 2021 - since October it has been gradually slowing down.
The decline in consumer price growth was facilitated by the strengthening of the hryvnia for the most part of the year, record harvests, weakening price pressures in certain world commodity markets, administrative restrictions on tariffs on housing and communal services for the population, and the strengthening of the National Bank's monetary policy.
The NBU was one of the first central banks to embark on a policy rate hike in response to increased inflationary pressures in 2021.
In general, the key rate has been increased from 6% to 9% per annum over the year.
In addition, in the second half of the year, the National Bank curtailed anti-crisis monetary measures.
As Ukrainian News Agency earlier reported, consumer prices increased by 10.0% in 2021.
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