Inflation has spiraled out of control: why prices are rising faster than the NBU predicted.

Consumer inflation in Ukraine reached 11.2% in November 2024, exceeding previous forecasts by the National Bank. Core inflation also increased to 9.3%.

The main reasons for the acceleration of inflation were the rising prices of processed food products, increased business costs for energy and labor, and the devaluation of the hryvnia.

A decrease in the supply of agricultural products led to higher prices for cheese and processed food. Non-food products also became more expensive due to currency fluctuations; however, the decline in clothing and footwear prices slowed down.

Prices for education, communications, culture, leisure, restaurants, and hotels increased due to rising production costs. Fuel prices, despite the decrease in global market prices, remain under pressure from domestic factors.

Administrative inflation accelerated due to the rising prices of alcoholic beverages and tobacco products resulting from devaluation and increased excise taxes. However, the growth of utility tariffs is restrained by a moratorium.

In the production sector, annual inflation slowed to 24.1%, partly due to falling energy prices. But in the mining industry, prices are rising due to increased demand, a lack of skilled workers, and rising energy and logistics costs.

Increase in inflation in Ukraine

Inflation accelerated in November. Core inflation was 1.2%, and since the beginning of the year reached 9.3%. Food prices have risen significantly, especially for vegetables, oils, and fruits. Prices for bread, milk, and cheese have also increased.

The projected inflation rate of 8.2% was significantly exceeded, indicating a strengthening of inflationary pressure. The NBU had previously emphasized the need to revise monetary policy to curb inflation.