The National Bank of Ukraine (NBU) has revised its inflation forecast for 2024 from 8.5% to 9.7% and for 2025 from 6.6% to 6.9%.
"In the coming months, price pressures will persist due to ongoing supply-side factors affecting food products, increased budget expenditures, rapid wage growth, and rising energy shortages during the heating season. As a result, inflation is expected to reach 9.7% by the end of 2024," said NBU head Andriy Pyshny during a press briefing on Wednesday.
According to him, inflation will start to decline in spring 2025, aided by a balanced monetary policy from the NBU, easing external price pressures, improvements in the energy sector, and increased harvests.
He emphasized that the NBU's forecast anticipates a reduction in inflation to 6.9% by the end of 2025 and aims to bring it down to 5% by 2026.
Pyshny also noted that in September 2024, inflation accelerated to 8.6% year-on-year and, according to NBU estimates, continued to rise in October.
"The tightening of price pressures in the second half of 2024 was expected and was outlined in the NBU's preliminary forecasts (Inflation Reports for January, April, and July 2024). At the same time, the growth of both consumer and core inflation (7.3% year-on-year in September) was higher than predicted," he stated.
The NBU head believes that a significant contribution to this trend was made by the rising prices of food products due to worse-than-expected harvests of various agricultural crops and the associated increase in raw material costs for the food industry.
In addition, the acceleration of inflation is also attributed to further increases in production costs, including energy and labor costs, and exchange rate effects resulting from the weakening of the hryvnia in previous periods.
"Price pressures will continue in the coming months; however, inflation is expected to slow down in spring 2025," concluded the central bank head.