Analysts expect the National Bank of Ukraine (NBU) to lower its key policy rate this month after inflation fell faster than anticipated, signalling room for a gradual easing of monetary policy, reported Ukraine Business News.
According to investment company ICU, annual inflation dropped to 11.9% in September from 13.2% in August and a peak of 15.9% in May. The figure was also below the NBU’s July forecast of 13.1%, reflecting widespread price slowdowns across most consumer basket components, except for education, hotels, and restaurants.
The decline in food prices was particularly pronounced, driven by a strong harvest of vegetables and fruits, analysts said. They added that no major risks are currently visible that could reverse the disinflation trend, as household incomes continue to grow modestly and social payments and public sector salaries remain restrained.
Regulated tariffs for gas and electricity are expected to stay stable for the next 12 months, while the robust harvest has kept the food market well supplied.
“We expect inflation to slow further to around 8.5% by the end of 2025, giving the NBU space to begin easing monetary policy,” ICU analysts said, forecasting a 50-basis-point rate cut at next week’s meeting.
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