The acceleration of inflation in Ukraine in the second half of 2024 is associated with the weakening of the hryvnia by approximately 10% from the fall of 2023, which affected the cost of imported products, according to the results of the year it may amount to 8-9%, according to the regional economist of the European Bank for Reconstruction and Development (EBRD) and former head of the Central Bank of the Republic of Macedonia Dimitar Bogov.
“We saw how Ukraine reduced inflation last year, but this year, after low inflation in the first half of the year, it is rising again in the second half of the year. The main reason is probably the devaluation of the currency… This has a certain effect on prices, because now Ukraine is very dependent on the import of foreign goods,” he said. in an interview with the Interfax-Ukraine agency.
According to his estimates, inflation should be expected to slow down to 6-8% next year.
“I would not expect inflation to return to the levels we saw in 2022, certainly not, the situation is currently under control,” Bogov emphasized.
Commenting on the recent decision of the National Bank of Ukraine to once again maintain the discount rate at the level of 13%, the EBRD economist called this level of the rate currently appropriate for the situation, but how the situation will develop remains to be seen.
“Taking into account the current trend of inflation, I would expect this level (of the discount rate) to be maintained for some period of time. We do not expect a significant worsening of the inflation situation, but it will not decrease very soon to the target level of 5% +-1%,” the EBRD economist added.
As reported, inflation in Ukraine fell to 5.1% in 2023 after a jump in 2022 to 26.6% from 10.0% in 2021.
According to the results of August of this year, inflation in annual terms increased to 7.5% from 5.4% according to the results of July and 4.8% according to the results of June.
In its July inflation report, the National Bank of Ukraine (NBU) forecast inflation at the level of 8.5% and 6.6% at the end of 2024 and 2025, respectively.
Since the beginning of 2024, according to the official exchange rate, the dollar has appreciated by 8.6%, or by UAH 3.26, and since the transition of the National Bank to the managed flexibility regime on October 3, 2023, by 12.8%, or by UAH 4.70.
