In January 2026, inflation slowed further to 7.4% yoy. In monthly terms, prices rose 0.7%. This is according to data published by the State Statistics Service of Ukraine.
Actual rates of headline and core inflation were running close to the trajectory of the NBU’s forecast published in the January 2026 Inflation Report.
The disinflationary developments were driven by a decrease in labor market imbalances, the persistence of second-round effects from last year’s ample harvests, and tighter competition from certain imported goods (meat and dairy ones in particular). As a result of these factors, price increases for processed foods and services decelerated somewhat faster than expected. However, the slowdown in the growth of administered prices was less rapid than projected in the NBU’s forecast. There also were signs of rising price pressure from raw food products.
Growth in raw food prices picked up to 8.2% yoy
In January, the increase in raw food prices accelerated in annual terms for the first time since June 2025. This dynamic was primarily driven by an uptick in prices for eggs due to a base effect from last year (warm weather in January 2025 boosted supply), for cucumbers amid limited supply, and for tomatoes due to higher import costs, as well as by the accelerated increase in fish and citrus fruit prices. Meanwhile, slower increases in prices for pork, beef, chicken, and flour helped price pressures ease.
Core inflation extended its decline, to 7.0% yoy
The growth in prices for processed foods continued to cool down, to 10.8% yoy, partially thanks to slower price increases for bread, sunflower oil, non-alcoholic beverages, butter, and cheeses.
Services inflation slowed to 11.2% yoy, in part due to pressure from the labor market easing off gradually. As a result, the growth in prices decelerated for insurance, financial services, communications, healthcare, transportation, car maintenance, personal care, eating out, and temporary accommodations.
In a first since May 2024, non-food prices resumed their decline (-0.4% yoy).
Administered prices rose at a slower pace of 9.1% yoy
The January slowdown in the growth of administered prices is chiefly attributable to a slower pace of price increases for alcoholic beverages and tobacco products.
Fuel inflation slowed to 5.7% yoy
This development largely reflected a base effect from last year’s gasoline and diesel prices. Meantime, the rate of increase in the price of LPG picked up, both due to the depletion of its stocks and higher production costs amid cold weather.
Inflation is seen to slow further in the coming months, but at a lower pace, including due to the fallout from large-scale disruptions to the energy sector. The NBU’s monetary policy will help curb underlying price pressures in order to bring inflation back to its target over the policy horizon.