Inflation in Ukraine Rose by 7.7% in July, NBU Forecasts Year-End Rate of 10%

Inflation in Ukraine has begun to rise again, with prices for goods and services increasing by 7.7% year-on-year in July. The National Bank of Ukraine (NBU) expects inflation to accelerate to 10% by the end of the year, although it will gradually decrease thereafter. The main factors driving inflation are Russian shelling, which leads to higher electricity costs, and the war in the Middle East, which affects fuel prices. Business costs are rising due to increased labor expenses and recovery from attacks. The weakening of the hryvnia and high consumer demand also contribute to inflation. The NBU forecasts that inflation will decrease to 6.9% by 2027 and reach the target rate of 5% by 2028. It is expected that cuts in budget expenditures and the recovery of the energy sector will help contain price growth. The NBU plans to actively operate in the foreign exchange market and maintain a high level of the discount rate to reduce pressure on the hryvnia and control consumer demand.

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