In June 2025, inflation declined to 14.3% yoy from 15.9% yoy in May. In monthly terms, prices rose 0.8%. This is according to data published by the State Statistics Service of Ukraine.
Inflation’s return to a downtrend in the summer had been expected, in particular due to the high base effect of administered prices from last year. However, the actual decrease in inflation turned out to be slower than projected in the April 2025 Inflation Report. The deviation from the forecast was primarily due to a more significant rise in raw food prices in recent months as spring frosts reduced the supply of these products.
Meanwhile, underlying inflationary pressures were somewhat weaker than projected, despite remaining substantial amid high costs to businesses of raw materials and labor, and robust consumer demand.
Growth in administered prices decelerated significantly, to 10.9%
The slowdown was primarily due to last year’s high base effect. Specifically, there was a one-off increase in power tariffs in June 2024.
Rise in raw food prices continued to pick up, to 28.7%
The growth in prices for certain stone fruits, apples, and berries accelerated considerably as adverse weather affected their supply. All types of meat increased in price more quickly because of higher costs, lower livestock numbers, and steeper external prices. By contrast, price increases for vegetables decelerated materially as the new harvest and active imports boosted their supply.
Fuel price increase accelerated to 3.1%
This pickup was primarily driven by the growth in gasoline and diesel prices amid highly volatile global oil prices and the hryvnia’s depreciation against the euro. In contrast, the LPG market saw price pressures ease due to an oversupply.
Core inflation resumed declining
In June, it slowed to 12.1%. The factors that restrained underlying price pressures included the NBU’s previous measures to tighten monetary policy, as well as a stable power supply. The hryvnia’s depreciation against the euro has had no tangible impact on core inflation so far.
Services inflation began to decline, to 14.4%, in a sign that pressure from the labor market is moderating. In particular, prices for transportation, communications, and personal care increased more slowly.
The rise in prices for non-food products also slowed, to 3.6%. Clothing and footwear prices remained lower than a year ago.
At the same time, the increase in the prices of processed foods picked up to 18.2%. Prices for meat products rose more rapidly due to higher costs of raw food inputs, as did prices for non-alcoholic beverages, including coffee, whose price reflected an uptrend in global coffee prices. However, price increases for bread and bakery products, sunflower oil, and most dairy products decelerated.
Inflation peaked in May and went back to declining in June, as projected by the NBU. However, headline inflation was running above the April macroeconomic forecast, primarily due to the weather’s impact. Inflation is expected to slow further in H2, partially due to monetary policy measures. An updated forecast for inflation and other macro variables will be presented during the NBU’s 24 July 2025 press briefing on monetary policy decisions. A detailed macro forecast will be published in the Inflation Report on 31 July 2025.