Page 24 - UKRRptSept23

confirmed by the slowdown of annual indicators: 12.8% in June and 15.3% in May. "It is worth expecting a continuation of the trend of a gradual decrease in the annual inflation rate, despite its certain monthly volatility," the Ministry of Economy summarized.
What consumer prices and dollar exchange rates do Ukrainians expect?According to the NBU, both financial analysts and the public expect a slowing trend to the growth of consumer prices. Financial analysts predicted in July that inflation would be 12% over the next 12 years (13.5% in June). The population expected inflation of 13.1% in July (14% in June). Bankers now predict inflation at the level of 13.8%. Regarding the national currency's strength, exchange rate expectations in Ukraine began to deteriorate. Both financial analysts and citizens are waiting for devaluation. In July, financial analysts predicted the hryvnia exchange rate for the next 12 months at UAH 40.26/$1 (UAH 39.54/$1 in June). Citizens' exchange rate expectations have worsened for the second month. In July, the population anticipated an exchange rate of UAH 39.75/$1 (in June, UAH 39.66/$1). In July, bankers forecasted the hryvnia exchange rate for the next 12 months at UAH 40.54/$1.
4.2.1 CPI dynamics
Inflation in Ukraine decreased to 11.3% in July, down from 12.8% in June and 15.3% in May, the State Statistics Service reported on August 9 (chart).
The biggest improvements were seen in restaurants and hotels at 18.5%, compared with 19.1% in June, miscellaneous goods at 15.7% against 18.8%, housing and utilities at 14.7% compared with 15.2%, as well as food and non-alcoholic beverages at 13.3% compared with 16.5%.
The consumer price index (CPI) decreased by 0.6%, easing from a 0.8% increase in June. Underlying inflation was recorded at zero, following deflation of 0.1% in June and 0.3% in May.
This is the lowest since the start of Russia's full-scale invasion, when inflation skyrocketed from 10% to 26.6% and underlying inflation surged from 7.9% to 22.6%.
The National Bank of Ukraine (NBU) recently revised its inflation forecast to 10.6% this year, 8.5% next year and 6.8% in 2025, following the positive results.
One of the key factors contributing to the moderation of inflation is the saturation witnessed in both food and fuel markets. Additionally, the decline in global energy prices has played a pivotal role in stabilising the overall inflationary pressures.
In response to the rapid disinflation, the NBU cut the key policy rate from 25% to 22% on July 28.
24 UKRAINE Country Report September 2023 www.intellinews.com