NBU expects inflation to slow down in 2025

The relevant statement was made by the National Bank of Ukraine (NBU), an Ukrinform correspondent reports.

“In November, inflation accelerated to 11.2% yoy. On the one hand, consequences of limited food supply due to this year’s weaker harvests were an important driver of price growth. The impact of this factor on inflation is expected to be neutralized next year as new harvests enter the market,” the report states.

On the other hand, as noted by the NBU, the inflationary surge is starting to look more and more fundamental, which is associated, among other things, with increased production costs (including those related to electricity and labor), as well as  the weakening of the Ukrainian hryvnia in previous periods.

Currently, inflation expectations are relatively stable, according to the regulator. However, the risk of them becoming unbalanced is increasing as househds pay more attention to inflation processes.

In the coming months, inflation is likely to continue to rise in annual terms due to the further impact of food supply factors, large budget expenditures, significant pace of wage growth, and wider energy shortages during the heating season, the NBU added.

Meanwhile, going forward, the regulator expects that inflation should decelerate as the situation in the energy sector improves and harvests increase.

A reminder that, on December 12, 2024, the National Bank of Ukraine (NBU) endorsed a decision to raise its key picy rate to 13.5%.

In October 2024, the regulator expected that inflation would hit 9.7% by the end of 2024 but dr to 6.9% next year.