Ukraine’s inflation falls to 21.3% y/y in March, but remains stubbornly high

Ukraine’s inflation falls to 21.3% y/y in March, but remains stubbornly high
Inflation in Ukraine fell in March but remains stubbornly high adn over 20%. / bne IntelliNews
By bne IntelliNews April 13, 2023

Consumer price inflation fell to 21.3% in March year on year from 24.9% a month earlier, but despite keeping the prime interest rates punishingly high, it remains elevated, Ukrstat reported on April 12. (chart)

Worryingly, the weekly inflation rate rose at a faster pace in March, up by 1.5% compared with 0.7% in February and 0.8% in January.

Core inflation also rose 1.5% in March from 0.5% in February and 0.7% in January, Ukrstat said.

Food inflation was one of the major drivers of rising consumer prices, with vegetable up a whopping 17.3%, while food and non-alcoholic beverages rose by a more modest 2.2% in March. Prices for eggs, soft drinks, meat and meat products, bread, pasta, milk and dairy products, butter, sugar, fruits, fish and fish products also increased by 1.8-0.4%. However, prices for rice, grain by-products, sunflower oil and lard fell by 2.3-0.2%.

Discretionary consumer items also saw big rises: the price of clothes and shoes was up by 12.5%, and healthcare saw an increase in prices by 0.6%, primarily due to the rise in the cost of outpatient services by 0.8%.

But transportation prices decreased by 0.9%, due to a 3% reduction in the cost of fuel and lubricating oils. However, travel on railway passenger transport has risen in price by 5.3%.

The National Bank of Ukraine (NBU) has been keeping its interest rates high in an effort to tackle inflation as well as maintain the stability of the currency. The government has reduced its inflation forecast for the year to 24% from 28%, while the NBU also revised its forecast downwards to 18.7% for the year from the 20.8% it forecast in January.