Food inflation in Ukraine accelerated, largely due to the effects of unusually hot weather with no precipitation in the summer and fall. According to the National Bank of Ukraine (NBU), in October, consumer inflation reached 9.7% in annual terms, exceeding the forecasted indicators. According to the regulator, the increase in prices continued in November. This information listed in the Macroeconomic and Monetary Review of the NBU.
The document states that adverse weather conditions have significantly affected crop yields, leading to a higher than expected increase in food inflation. At the same time, administrative inflation and fuel prices increased faster than predicted.
Core inflationary pressure also increased in October. Core inflation increased due to the increase in the price of processed food products, which was caused by the increase in the cost of raw materials, the increase in business costs for electricity and labor costs. In addition, the effects of carrying over devaluation of the hryvnia from previous periods had an impact on prices.
“Prices for non-food products also accelerated their growth, primarily under the influence of the exchange rate factor in previous periods. This probably also influenced the slowdown in the decline of prices for clothing and footwear. Prices for services, in particular, health care, communication, grew somewhat faster and personal care due to the increase in production costs”, – informed the National Bank.
