NBU predicts inflation to slow down: what to expect for prices by the end of the year.

The National Bank of Ukraine predicts that price growth will begin in the second half of 2024 and will last until the first half of 2025. However, already in the middle of this year, a decrease in the growth rate will be observed. It is expected that inflation will reach 8.3% by the end of 2025.

According to economist and member of the Council of the National Bank of Ukraine Vasyl Furman, high inflation, especially in the food sector, is explained by insufficient grain harvest in 2024. This is a key factor contributing to price increases. However, in 2025, an improvement in the harvest is expected, which will lead to a decrease in inflation.

'There are several factors. When the price of milk increased last year, it indicated a rise in prices for animal feed and electricity. In 2025, the cost of feed will not increase, and there have been no announcements about increasing electricity tariffs yet,' Furman noted.

One of the factors affecting inflation is the war. The sooner it ends, the less loss our country will incur. Today, the energy sector is significantly suffering due to hostile shelling, which leads to price increases. However, after the conflict ends, it will be necessary to replace damaged equipment.

Another factor contributing to price growth is the labor shortage. Due to the war, many Ukrainians have gone abroad, and another part is engaged in the defense sector, leading to a shortage of specialists in civilian industries. Therefore, to attract new workers, salaries need to be raised. In 2024, the average salary increased by over 23%, and this year a growth of 18% is expected, which will also affect price increases. It is also necessary to take into account global trends as Ukraine is highly dependent on them.

'We are very dependent on global trends. I am pleased to see the price of oil falling as it positively affects us for many reasons. Our enemy will receive less funding for financing the war in our country,' Furman explained.

Another factor worth considering is currency fluctuations. It has a slight impact on price growth, but it is still worth taking into account. For three months now, the hryvnia has demonstrated stability and is regaining lost positions since mid-February, and the National Bank has significant foreign exchange reserves, Furman emphasized.