National Bank: Inflation to grow moderately in the coming months

Inflation is expected to grow moderately in the coming months. However, the National Bank of Ukraine (NBU) predicts a gradual slowdown. NBU contributes it to a «prudent monetary policy and the reduction of external price pressure».

This information was provided by the NBU.

«Inflation has accelerated as expected in recent months. In August, consumer inflation rose to 7.5% year-on-year, which was close to the NBU’s July forecast. Underlying price pressures, as measured by core inflation, also increased (6.5% y/y),» the NBU stated.

The rise in consumer prices is attributed to several factors. These include this year’s poorer harvest, higher business costs for food raw materials, energy, and labor. The effects of the hryvnia’s depreciation in previous months are also a contributing factor. Despite this, inflation expectations have remained relatively stable, according to the NBU.

Moderate inflation growth is anticipated in the coming months due to the expansion of aggregate demand driven by increased budget spending, higher business costs for labor and electricity, and rising excise taxes.

«However, the NBU’s prudent monetary policy and the reduction of external price pressures will help slow inflation gradually and bring it back to the 5% target in the coming years. To achieve this, the NBU will maintain a controlled situation in the foreign exchange market,» the statement added.

As a reminder, at its meeting on September 19, the Verkhovna Rada passed a law regulating the privatization of state-owned banks. The law includes a provision that allows for the sale of any state stake in a bank, not just 100% of the state’s shares. The law also mandates that the privatization of state-owned banks must be conducted through the Prozorro system.

According to Prime Minister Denys Shmyhal, the government currently has no strategy for the sale of Oschadbank and Ukreximbank, but it is considering allowing private investors to enter Ukrgasbank and Sens Bank.