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NBU March 2019 Inflation Update

10 April 2019

Press Release


In March 2019, consumer price inflation declined in annual terms – to 8.6%, down from 8.8% in February. In monthly terms, prices increased by 0.9%. This is according to data released by the State Statistics Service of Ukraine.


Actual inflation in March was practically in line with the forecast trajectory that the NBU published in its January 2019 Inflation Report. Core inflation decelerated slightly faster than expected, primarily due to a strengthening of the hryvnia against the currencies of Ukraine’s main trading partners. The growth in food prices was somewhat higher than projected, but the temporary factors that drove its acceleration in the final days of 2018 and at the start of 2019 are gradually wearing off.


·      In March 2019, core inflation declined in annual terms to 7.6%, down from 7.8% in February.


Held down by the strengthening of the hryvnia against Ukraine’s main trading partners, the growth in prices for non-food products continued to decelerate (from 2.7% yoy in the previous month). The pace of the increase in the prices of household appliances, furniture, household goods, and pharmaceutical products decelerated compared to February. In addition, prices for audio-visual devices and information processing equipment declined. The growth in prices for clothing and footwear continued to be slow.


The prices of services grew at the same rate as in February (14.1% yoy). The prices of catering services, chemical cleaning services, repair services, outpatient services, and insurance services increased at a slower rate, as did housing rentals. The growth in housing maintenance fees (16.3% yoy) slowed against a high comparison base. Meanwhile, cable TV subscription rates, prices for mobile communication services, and cinema ticket prices grew more rapidly, as businesses in these sectors ramped up investment.

The pace of annual growth in the prices of highly processed foods slowed moderately (to 8.7% yoy). Meat product prices grew less rapidly, thanks to a more ample supply and lower global prices for these goods. Lower global prices for oilseeds, and a bumper harvest of sunflowers contributed to the slower growth in sunflower oil prices. The growth in dairy product prices was less significant. In contrast, higher production costs accelerated the increase in bread product prices.


·      The growth in raw food prices decelerated (to 3.6% yoy). At the same time, fruit prices continued to fall, owing to cheaper imported bananas and citrus fruits, and an ample harvest of apples last year. Egg prices continued to decline due to a large increase in poultry production. In addition, the growth in the prices of borshch vegetables decelerated but remained high, as the supply of these products in the domestic and European markets fell in previous periods. At the same time, prices for greenhouse vegetables increased more rapidly, reflecting the scarce supply of these goods due to lower imports from Turkey. Higher prices in external markets and a shortage of quality raw materials were additional factors that caused a steep rise in flour prices.


·      The growth of administered prices held steady (at 18.7% yoy). The increase in the charges for cold water supplies and sewage collection and in passenger railway and public transport fares was offset by the slower growth in prices for basic types of bread, and for alcoholic beverages and tobacco products.


·      Fuel prices remained lower than last year (down 3.5% yoy). At the same time, with the rise of oil prices on the world markets in recent months, the fall in domestic fuel prices in March slowed compared to February.


Current changes in headline inflation and its components are evidence that inflationary pressure continues to ease. The NBU’s policy will continue to focus on slowing the growth of prices, and meeting the medium-term inflation target of 5% ± 1 pp.


The NBU will release the key indicators of its new macroeconomic forecast on 25 April 2019 during a press briefing on decisions taken by the NBU Board at its meeting on monetary policy issues. The April 2019 Inflation Report, planned for publication on 3 May this year, will describe the updated forecast in greater detail.



Last modification   10.04.2019