In May 2025, inflation picked up to 15.9% yoy. In monthly terms, prices grew 1.3%. This is according to data published by the State Statistics Service of Ukraine.
In May, inflation was running above the NBU’s forecast published in the April 2025 Inflation Report. The deviation from the forecast trajectory was primarily driven by a sharper increase in raw food prices due to adverse spring weather and active exports of food. Underlying inflationary pressures were somewhat weaker than expected, but remained fairly persistent amid robust consumer demand and the high cost to businesses of raw materials and labor.
Growth in raw food prices accelerated to 26.4%
Raw food prices surged in May in annual terms. Specifically, price increases picked up significantly for pork, chicken, beef, eggs, and milk amid active exports, high external prices, increased production costs, and decreased numbers of pigs and cattle.
The growth in prices for apples, stone fruits, berries, and some of the greenhouse vegetables accelerated significantly because of delayed harvests and lower yields due to cold snaps and frost. The prices of fish, cereals, flour, and sunflower oil rose faster.
Core inflation picked up to 12.3%
The rise in the prices of processed foods accelerated to 18.0% yoy in May. The growth in prices for bread, meat products, certain dairy products (including cheese, sour cream, and cream), as well as non-alcoholic beverages, gathered speed, fueled by higher prices for raw food inputs and a further increase in companies’ labor costs.
The growth in the prices of non-food products held steady (3.8% yoy), remaining moderate thanks to sustainable FX-market conditions.
Services inflation remained invariably high (14.6% yoy), reflecting continued wage growth and robust consumer demand. Compared to April, the cost of restaurant and hotel services, personal care services, and outpatient services increased faster. In contrast, the increase in prices for transportation, insurance, financial services, and recreational and cultural services decelerated.
Administered prices were up 19.8%
The faster growth in prices for some of the excisable products was due to a further rise in production costs, tax changes for manufacturers and importers of tobacco products, and tighter measures to combat the shadow-market supply. The increase in the prices of pharmaceutical products and medical products, appliances, and equipment slowed as the hryvnia grew somewhat stronger against the U.S. dollar.
Fuel price growth moderated to 1.2%
As expected, fuel price growth decelerated in May from April thanks to cheaper imports, a surplus of diesel and LPG in the domestic market, and competition between gas station chains in the gasoline segment.
Inflation was rising in the spring, which was expected. At the same time, according to the NBU estimates, inflation in May already reached its peak this year. Going forward, inflation is anticipated to slow for a wide range of goods and services. This should be driven by an expansion of the food supply as the new harvest arrives. The slowdown in inflation will also be facilitated by a better situation in the energy sector compared to last year, lower global crude oil prices, a decline in external price pressures, and the sustained effects of the NBU’s monetary policy measures. Last year’s high base of comparison for administered prices will also have a significant statistical effect, in particular due to the one-off increase in power tariffs in June 2024.