This is reported by RBK-Ukraine referencing the "Inflation Report" from the National Bank of Ukraine (January 2025). This information is also provided by Kontrakty.UA.
According to the report, inflation accelerated to 12.0% year-on-year in December 2024, surpassing the previous NBU forecast from October (9.7%).
The NBU indicates that the rapid increase in consumer prices was largely driven by temporary factors, primarily linked to the effects of poorer harvests from the previous year.
At the same time, fundamental price pressures were also intensifying. This is evidenced by the further acceleration of core inflation (to 10.7% year-on-year in December), particularly due to a sharp rise in service prices (12.5% year-on-year in December). Such price dynamics were attributed to increased business costs for raw materials, supplies, and electricity, as well as rising wages amid a persistent labor shortage, as explained by the central bank.
"In the early months of 2025, inflation is likely to continue rising due to both temporary factors, including the effects of lower harvests from the previous year, and fundamental ones, primarily the pressure from business production costs. Inflation is expected to peak in the second quarter and begin to decline from mid-year," the review states.
According to the NBU's forecast, inflation will reach 14.3% by the end of the first quarter, and by the end of the second quarter, it will be 13.6%, 12% by the end of the third quarter, and 8.4% by the end of the fourth quarter.
"It is anticipated that by the end of 2025, inflation will slow to 8.4%, and in 2026, it will reach the target of 5%. This will be supported by measures in the NBU's interest rate and exchange rate policy, as well as higher harvests, improvements in the energy sector, a reduction in the fiscal deficit, and moderate external price pressures," the review notes.
Recall that in January, the NBU downgraded its forecast for consumer price growth in Ukraine for 2025 to 8.4%. The downgrade of 1.5 percentage points occurred due to rising food prices stemming from adverse weather conditions and the transfer of higher production costs, including due to labor market imbalances.