Page 45 - UKRRptDec23

4.2 Inflation
The National Bank and the Ukrainian government have updated price forecasts in Ukraine. At the end of this year, consumer price growth will slow to 5.8% from 26.6% in 2022. The faster-than-expected inflation decrease is primarily the result of greater food supply following higher harvests and increased production and occurred despite difficulties exporting agricultural products, reported the NBU. As the regulator expects, in 2025, the consumer price growth rate will slow to 6% against a background of decreased security risks, allowing businesses to adjust logistics and production gradually. At the same time, pressure on prices will persist due to disparities in the labor market, increased consumer demand, and rising administrative tariffs. The Ministry of Economy anticipates a scenario in which the consumer price growth rate in Ukraine will be within limits that are characteristic of the last years before the war, as stated in the September Inflation Survey. However, the dynamics of consumer prices will depend on several factors and significant changes, including force majeure.
4.2.1 CPI dynamics
The National Bank explained why prices fell in October. The regulator noted that inflation has continued to slow down, primarily due to further growth in the food supply and the preservation of stability in the foreign exchange market. Thus, in October, consumer inflation in annual terms slowed to 5.3% from 7.1% in September. In monthly terms, prices increased by 0.8%. "The price of fruits and vegetables continued to decline due to a good harvest because of favorable weather conditions and the increase in production volumes in several regions," the NBU noted. In October, fuel prices rose against rising global oil prices and logistical difficulties. Price increases for
45 UKRAINE Country Report December 2023 www.intellinews.com