Inflation in Ukraine hit 26.6% y/y in October

Inflation in Ukraine hit 26.6% y/y in October
Inflation in Ukraine is up again to 26.6% y/y in October despite 25% prime rate. Printing money remains the main source of budget funding that is fuelling inflation. / bne IntelliNews
By Dominic Culverwell in Oxford November 11, 2022

Inflation in Ukraine increased by 2.5% in October 2022 compared to September and by 26.6% year on year, Economic Pravda reported on November 10. (chart)

On the consumer market, the biggest increase was seen in food and non-alcoholic beverages, which rose by 4.2% compared to September, according to data from the State Statistics Service. Eggs rose in price the most, by 60.5%. Prices for lard, vegetables, fruits, meat and meat products, non-alcoholic beverages, fish and fish products, cheese, butter and milk climbed by 2.3-11.3%.

Prices for alcoholic beverages increased by 0.8% and tobacco products went up by 0.9%. However, grain-processing products fell in price by 4.8%. Clothing increased by 1.7% and footwear by 2.1%. In the health care sector, prices firmed by 1.2%, with hospital services increasing by 1.8% and outpatient services by 1.6%.

Transport prices went up by 0.8%, mainly due to a 1.5% rise in the price of vehicles. At the same time, fares in railway passenger transport became cheaper by 5.1%, the State Statistics Service said.

In September, Ukraine’s inflation accelerated to 1.9% from 1.1% in August and 0.7% in July. The y/y inflation rate in September was 24.6% up from 23.8% a month earlier, 22.2% in July and 21.5% in June.

The National Bank of Ukraine (NBU) noted that inflation has been “marginally lower than expected” and business activity was slightly higher. The bank believes that inflation will reach around 30% this year, but should slow in the next few years provided that security risks subside as expected and monetary and fiscal policies are well co-ordinated. Inflation could drop to 20.8% next year and to below 10% in 2024. However, high energy prices will stifle a faster decrease.