The NBU expects a new acceleration of inflation due to food, fuel, and transport

Inflation in Ukraine, according to a preliminary estimate by the National Bank, continued to accelerate in August after rising to 7.7% year-on-year in July. The main pressure on prices came from more expensive raw food products, fuel, and public transport.

This is stated in the September Macroeconomic and Monetary Review of the National Bank of Ukraine.

Official data from the State Statistics Service on inflation for August were not yet available at the time of publication of the review, so the NBU does not provide a specific indicator for the month. At the same time, the regulator assesses that the trend towards accelerating price growth has persisted.

In July, annual inflation rose to 7.7% against 7.2% in June. On a monthly basis, consumer prices increased by 0.3%. Core inflation remained at 8.1% year-on-year.

What is pushing prices up

The National Bank explains the July acceleration primarily by the shift in the seasonality of supply of certain vegetables and higher administrative inflation.

In August, the set of factors changed somewhat. According to the regulator's assessment, inflation was additionally driven by raw food products, fuel, and public transport services.

Fuel prices remain one of the important inflationary factors after the sharp increase in oil prices on the global market. Back in July, the NBU noted that gasoline and diesel noticeably rose in price in the second half of the month after a new jump in oil quotations.

At the same time, administratively regulated prices in July grew faster due to an increase in water supply and sewerage tariffs in some cities, as well as public transport fares.

Inflation may approach 10% by the end of the year

The NBU earlier worsened its inflation forecast for 2026. The regulator expects consumer price growth to be about 10% by the end of the year.

In addition to food and energy carriers, price dynamics are pressured by high business costs for electricity, labor, and recovery after Russian attacks.

At the same time, in 2027 the National Bank expects inflation to slow to 6.9%, and in 2028 a return to the target level of 5%.

To curb inflationary pressure, the NBU in late July raised the key policy rate from 15% to 15.5%. In the September review, the regulator noted that this helped maintain the attractiveness of hryvnia savings: in August, time deposits increased by UAH 2.8 billion, and the portfolio of hryvnia government bonds by UAH 1.7 billion.

Based on materials from: National Bank of Ukraine