Economy 2023-09-15T04:42:25+03:00
Ukrainian news
Main Reason For Inflation Acceleration Remains Direct Consequences Of Full-Scale War - NBU

Main Reason For Inflation Acceleration Remains Direct Consequences Of Full-Scale War - NBU

Russia, war, Ukraine, NBU, inflation, full-scale war, war with Russia, full-scale invasion, Russia's war against Ukraine, Russia's full-scale invasion, inflation in Ukraine

According to the National Bank of Ukraine (NBU), the main reason for the acceleration of inflation is the direct consequences of Russia's full-scale war against Ukraine.

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

In October 2022, annual consumer inflation accelerated to 26.6% (from 24.6% in September).

In monthly terms, prices increased by 2.5%.

The main reason for the acceleration of inflation remains the direct consequences of Russia's full-scale war against Ukraine.

Among them: disruption of production and supply chains, growth of business production costs, situational increase in demand for certain goods and services, as well as a decrease in the supply of goods.

Indirect consequences of the war also affected prices: exchange rate effects and worsening expectations of the population and business.

The actual rates of price growth corresponded to the trajectory of the National Bank's basic forecast published in the Inflation Report for October 2022.

The growth of prices for processed food products accelerated to 27.2% year over year.

Meat products, confectionery, soft drinks and sauces rose in price due to increased business production costs due to higher costs of raw materials, energy and logistics.

The growth of prices for dried fruits, fish products, olive and sunflowerseed oil and derivatives of the latter (mayonnaise, margarine, spreads) accelerated against the background of the subsequent transfer to prices of changes in the exchange rate of the hryvnia.

In view of the significant expansion of the export of dairy products from Ukraine, the price of butter and cheese on the domestic market has increased.

The prices of non-food products also grew at a higher rate (by 19.9% year over year) under the influence of depletion of stocks of imported products (purchased at a lower exchange rate), effects of carryover of the adjusted exchange rate of the hryvnia, and deterioration of expectations.

The moratorium on raising tariffs for natural gas and thermal energy for the population continued to restrain administrative inflation.

The rate of growth of prices for tobacco products also did not change compared to the previous month due to increased competition from illegal products.

In addition, the growth of the cost of transport services slowed down due to the stabilization of fuel prices.

At the same time, alcoholic beverages became even more expensive against the background of rising production costs (for energy, raw materials, and containers).

The cost of firewood also increased due to increased demand for alternative types of fuel as a result of shelling of energy infrastructure.

In order to maintain control over inflationary processes, the National Bank keeps the discount rate at the level of 25% and predicts that it will remain at the current level for a long time.

This is necessary to ensure the attractiveness of hryvnia assets, reduce pressure on the foreign exchange market, balance expectations and ultimately reduce inflation in the coming years.

As Ukrainian News Agency earlier reported, in October 2022, consumer prices rose by 2.5%.

In January-October 2022, inflation was 24.8%.