Regular version of site
Skip to content
NBU April 2024 Inflation Update

NBU April 2024 Inflation Update

In April 2024, consumer inflation was flat from the previous month in annual terms, at 3.2%. In monthly terms, prices grew by 0.2%. This is according to data published by the State Statistics Service of Ukraine.

The actual rates of price growth were slightly below the trajectory of the NBU’s forecast published in the April 2024 Inflation Report (3.6% yoy). Deviations from the forecast continued to be driven by factors that varied significantly and were hard-to-project, primarily a steeper decrease in prices for raw food products. This was due to the effects of this year’s warm weather and eased pressure on business costs as raw materials fell in price amid last year’s ample harvests, and to the reorientation of producers to the domestic market due to the western borders blockade.

Meanwhile, underlying inflationary pressures, most influenced by monetary policy, persisted. Core inflation rose to 4.4% yoy in April, generally in line with the NBU’s forecast. On the one hand, second-round effects from lower prices of raw food products and improved inflation expectations restrained underlying inflationary pressures. On the other hand, the increase in businesses’ labor costs and the increase in import prices fueled by the western border blockade were putting upward pressure on consumer prices.

Prices for raw food products continued to plunge, by 6.5% yoy

Specifically, the decrease in egg prices deepened due to the growth in production and the shift of producers to the domestic market as a result of the western border blockade. Thanks to last year’s high harvests amid limited opportunities for exports due to the border blockade, the prices of sugar, flour, and cereals continued to fall.

The faster start of sales of greenhouse products at lower prices due to warm weather and imports from Türkiye contributed to the further decrease in the price of tomatoes and cucumbers. Prices for some of the borshch vegetables also decreased due to increased sales of products from storages. The latter probably slowed the rise in apple prices. At the same time, prices for potatoes and beets remained high amid a limited supply of quality products, as did the prices of other fruits as the border blockade impeded imports.

Price increases for most types of meat slowed, and pork prices fell thanks to less pressure on business costs, especially from feed prices. Meanwhile, the growth in milk prices accelerated somewhat as exports of dairy products increased.

Increases in administered prices slowed to 9.5% yoy

Price increases for alcoholic beverages continued to decelerate due to reduced pressure from business expenses on energy, raw materials, licenses, and because of competition from the shadow market supply. The growth in tobacco product prices halted. The moratorium on raising utility prices for households also restrained the increase in administered prices. In contrast, prices for pharmaceuticals and healthcare products and equipment grew more quickly.

Fuel price growth accelerated to 18.1% yoy

The growth in fuel prices was primarily driven by the rise in global oil prices and the drawdown of reserves of oil products imported at a lower price.

Core inflation pick up to 4.4% yoy

The growth rate of processed food prices accelerated to 5.5% yoy, including due to the effects of the western border blockade. In particular, prices for butter, soft cheeses, and some imported long-shelf-life goods (chocolate, coffee, olive oil) rose faster. Bread price growth accelerated due to increases in labor costs of businesses and the drawdown of stocks of quality raw materials.  At the same time, other flour products rose in price more slowly on the back of the effects from lower business expenses on raw materials. The same factor pushed sunflower oil prices further down and restrained the growth in the prices of sunflower-oil-based products. The increase in prices for meat products decelerated as pressure on business costs eased off against the backdrop of cheaper feed.

Nonfood product prices decreased more slowly (by 0.6% yoy). The decline in the prices of goods from this group was primarily driven by declining prices for clothing and footwear, although these had slowed. In contrast, price increases for other nonfood products picked up.

Service prices remained unchanged from March (9.7% yoy). On the one hand, prices for catering and hotel services continued to rise more slowly, weigh down, by second-round effects from the cheapening of raw food products, among other things. On the other hand, the prices of outpatient services, transport services, and beauty salon services grew at a higher clip, as did the cost of operating own vehicles.

In April, the decrease in annual inflation stopped, and underlying inflationary pressures expectedly edged higher. The NBU projects that inflation will accelerate moderately in the coming months as the effects of last year’s higher harvests and this year’s warm weather wear off, businesses’ labor costs rise, and the administrative component of inflation increases.

At the same time, inflation will be restrained by the weakening of external inflation pressure and by monetary policy measures, including steps to keep the FX market situation under control and protect household savings from losing value to inflation. Monetary policy measures will continue to aim to keep inflation moderate this year and bring it to its target range of 5% ± 1 pp in coming years.

Subscribe for notifications

Subscribe to news alerts