Julia Shvytkina
31 October 2022 15: 00
Headings: News Society Economy

Food prices will rise by 50%, and gasoline and, possibly, a communal apartment will also rise in price

The National Bank reported on the situation with inflation in Ukraine - the only hope is to reduce security risks.

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Food prices will rise by 50%, and gasoline and, possibly, a communal apartment will also rise in price

In general, inflation in Ukraine by the end of this year should not exceed 30%, but food inflation is expected to increase in the next two quarters: according to the forecasts of the National Bank, it will be higher 50%. This is stated in the latest inflation report of the NBU.

In particular, it is noted that price increase due to high risks and business costs, which will intensify in the winter due to expensive energy sources. True, the NBU reassures that next year food inflation will rapidly decline due to the restoration of optimal technological and logistical ties, the entry into the market of new higher yields, including those from the southern regions of the country. Besides, disinflationary factor will decline in world prices for food and energy resources.

The NBU report also states that fuel prices will also rise. But the increase in its value should not exceed up to 20% per year, according to the regulator. In any case, this will lead to an increase in the cost of transport services.

The NBU noted that after the end of the moratorium to increase utility rates, they will also increase. True, they promised that due to the high social significance of their the increase will be phased and will be accompanied by increased social support.

But for now Ukraine gotta get through this winter constant attacks of the Russian Federation on the energy infrastructure. In this regard, the NBU reported that in the winter period there will be additional limited economic activity and forced reduction of electricity consumption. According to the National Bank, gas and coal reserves will be at the minimum sufficient level, but given the more rapid decline in consumption than production, and expected imports, including from USA. True, in the case cold winter or additional destruction energy infrastructure during peak hours to balance the system will have to resort to forced shutdowns.

As for general inflation, the National Bank also gives positive forecasts for subsequent years, but subject to reduce security risks and coordinated monetary and fiscal policy. Thus, inflation is expected to slow down next year to 21%, and in 2024 it will be lower 10%. The fastest slowdown in inflation will be hampered, first of all, by high cost of energy.

According to the results 2022 years, according to the National Bank, Ukraine's economy will shrink by almost a third. The main contribution to the decrease in real GDP, according to the results of the current year, will have domestic demand. BUT hryvnia exchange rate support will remain the NBU's main means of ensuring macro-financial stability.

A key driver of the future gradual recovery of the economy of Ukraine at about 4-5% per year will be the expected reduction in security risks from the middle 2023 year.

Recall that earlier the head of the NBU Andrey Pyshny declared that in conditions of a full-scale war inflation in Ukraine is expected to grow, but remains manageable.

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