Prices in Ukraine are set to rise significantly – the pace of inflation can only be slowed after the harvest of agricultural crops begins.
This is mentioned in the December report on financial stability prepared by the National Bank of Ukraine (NBU).
According to analysts, in November, the annual inflation reached 11.2%, but its current increase will be temporary.
The primary reason for the rise in prices is the summer drought and poor harvest, which have led to increased food prices, as explained by the NBU. "The devaluation of the hryvnia over the year," the report notes.
It is forecasted that in the first half of 2025, inflation will remain ambiguous but will begin to decrease after the new harvest enters the market. The following factors will also contribute to the reduction in inflation rates:
- a high comparison base in 2024;
- stability in the energy sector;
- expected decrease in energy resource prices on global markets.
However, rising production costs, including labor costs, will continue to put pressure on prices. The NBU believes that inflation will return to the target level of 5% only in 2026.
Nevertheless, deposits and government bonds in hryvnia remain attractive, as their yields exceed the projected inflation for the end of 2025 due to high interest rates.