In subsequent years, food inflation will return to a low level.
In March, the rate consumer price growth in Ukraine fell to 3.2%. This is below the National Bank's forecast. Inflation will accelerate in the near future.
This is stated in the NBU Inflation Report for April 2024.
The rate of consumer inflation has decreased due to the effects of the NBU monetary policy.
We are talking, in particular, about a controlled situation on the foreign exchange market, an increase in the supply of certain food products, and less pressure from costs of raw materials and energy.
At the same time, the NBU predicts that inflation will remain low in the coming months, but will subsequently begin to moderately accelerate. In the second quarter it will return to the target range (5%+1 percentage point) and temporarily leave it in the second half of the year. This will occur both due to pressure from business labor costs, the subsequent resumption of consumer demand, and due to the wearing off effects of the previous year's large harvests and this year's mild winter.
The NBU notes thatraw products in the short term will still remain cheaper than last year.However, in the second half of the year, prices for them will rise against the backdrop of a low comparison base due to a smaller expected harvest. p>
According to the NBU forecast, in subsequent years, food inflation will return to a low level (3-4% per year)due to a gradual increase in food production, as well as a decrease in world food prices. p>
The National Bank also notes that the fixation of tariffs for certain housing and communal services, including gas, hot water and heating, remained a significant factor in curbing the administrative component of inflation. However, it is expected that tariffs for housing and communal services will gradually be brought to market-based levels. This will become a significant pro-inflationary factor.
The Ministry of Agricultural Policy believes that in 2024 prices for basic products in Ukraine will remain stable, but only those produced in Ukraine.
