Governor of the National Bank of Ukraine Valeriia Gontareva said that in the first half of 2014, headline inflation stood at 11.6%. Annual CPI inflation rose by 12%.

“Following three months of elevated consumer price inflation, CPI inflation continued to increase at a subdued pace in June. The consumer price index rose by 1% versus 3.8% in May," she said.

A rise in the rate of inflation was driven by a 0.7% increase in prices for foodstuffs and soft beverages, contributing 0.3 p.p. to the change in the CPI. At the same time, a new harvest of fruit and vegetables led to a decline in prices for these products. In May, food prices picked up by 3.6%.

The prices of electricity had surged by 11.3%, contributing 0.2 p.p. to the change in the CPI. At the same time, the effect produced the exchange rate adjustment was no longer felt.

“According to our estimates, most inflation-generating factors operated in the first half of 2014. In particular, a scheduled rise in administered prices was observed across all categories. Therefore, inflation is expected to increase at a much slower pace in the second half of 2014 (owing to a good grain harvest). It is expected to rise by 5%. In 2014, inflation rates are expected to increase by 17%. In 2015, inflation is projected to move back to the single-digit territory," noted Governor of the National Bank of Ukraine Valeriia Gontareva.