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At the end of the year, Ukraine expects inflation to be between 8% and 10%. This is considered a moderate figure for a country at war.
Investment banker Serhiy Fursa discussed this on Hromadske Radio.
The expert noted that the rise in prices for services in the energy sector has partly begun to affect the prices of goods for ordinary consumers. For example, we observed that during the blackouts, the prices of vegetables grown in greenhouses increased.
“Electricity prices for industry are about twice as high as those for households. On average, they have significantly increased over the past year. When there was a shortage, large businesses had to import electricity. Imported electricity from Europe (Slovakia and Hungary) is much more expensive than Ukrainian electricity, and this has also affected the cost of goods», — Fursa explained.
However, the banker stated that there is no staggering inflation in Ukraine. Last year, it was at a record low, and at the beginning of this year, in April-May, annual price rising in Ukraine was lower than in the US, which has never happened before, according to Fursa.
“Now, due to the problems with electricity, prices have risen slightly. By the end of the year, inflation will be in the range of 8% to 10%. Again, this is a very moderate figure for a country at war. Therefore, there is no need to claim that we are experiencing some kind of super-inflation,” the banker asserted.
Fursa emphasized that controlling inflation is the task of the National Bank, which is doing so within its capabilities, including by restraining the devaluation of the hryvnia.
As a reminder, the NBU has announced that inflation will grow moderately in the coming months. However, the NBU’s “prudent monetary policy and the reduction of external price pressure” will contribute to its gradual slowdown.
The NBU added that in August, consumer inflation rose to 7.5% year-on-year. Underlying price pressures, as measured by core inflation, also increased to 6.5% year-on-year.
The rise in consumer prices is attributed to the impact of this year’s poorer harvests, higher business costs for food raw materials, energy, and labor, among other factors. It also reflects the effects of the hryvnia’s depreciation in previous months. However, inflation expectations remained fairly stable, according to the NBU.
Inflation is expected to grow moderately in the coming months due to the expansion of aggregate demand as a result of budget spending, higher business costs for labor and electricity, and increased excise taxes.