In March 2025, inflation picked up to 14.6% yoy. In monthly terms, prices rose 1.5%. This is according to data published by the State Statistics Service of Ukraine.
The growth in consumer prices slightly exceeded the NBU’s forecast published in the January 2025 Inflation Report.
The pickup in inflation was largely due to the residual effects of last year’s lower harvests and a further increase in prices for excisable products. On the other hand, these price developments were also driven by fundamental factors: high costs of energy and labor incurred by businesses, as well as robust consumer demand.
Growth in raw-food prices accelerated to 17.0%
In March, the growth in prices for raw foods picked up significantly in annual terms. Prices for fruits, vegetables, flour, and cereals increased more rapidly, fueled by the lingering effects of last year’s low harvests and higher storage costs. Prices for eggs, pork, chicken, and sugar approached the levels of Ukraine’s trading partners due to a worsening of epizootic conditions globally and in Ukraine and because of sustained exports.
Core inflation was 12.4%
Price increases for processed foods picked up to 17.3% yoy in March. The rise in the prices of raw food inputs, further increases in the costs of power and labor incurred by businesses, robust consumer demand, and rising global food prices led to faster growth in prices for bread and bakery products, meat products, and sunflower oil. Meanwhile, the growth in the prices of dairy products decelerated. This is attributable to both an increase in supply due to imports and a surplus of raw milk on the market.
Prices for non-food products increased moderately, by 4.7% yoy, amid improved exchange rate expectations. Clothing and footwear prices remained lower than last year.
Services inflation accelerated to 14.6% yoy. Compared to February, the prices of healthcare, restaurant and hotel services, culture and recreation services, as well as transportation, insurance, and financial services, grew faster. In contrast, the growth in prices for communication services decelerated.
Administered prices were up 19.0%
The faster increase in the prices of excisable products was propelled by both the further growth in production costs and price adjustments due to a test launch of the e-Excise tax and because of an increase in the excise tax on tobacco products and its conversion into euros that took effect in late March. Pressure from production costs spurred the growth in prices for pharmaceuticals and healthcare supplies and equipment. At the same time, a reduction of marginal mark-ups on certain medical supplies in March did not affect their prices. As before, the moratorium on raising certain utility tariffs for households restrained administered inflation.
Fuel price growth moderated to 9.9%
In March, fuel price growth decelerated from February due to cheaper imports, optimized logistics, and ample stocks. Meantime, the gradual growth in demand and a strengthening of the euro exerted upward pressure on prices.