Prices will rise more than forecast: the NBU 'reassured' Ukrainians

A month after the NBU acknowledged faster inflation growth than expected, the National Bank again cut its forecast. This autumn a new surge in prices will occur, pushing up the annual inflation. This was reported by Volodymyr Lepushynskyi, Deputy Governor of the National Bank of Ukraine, in a column for Interfax-Ukraine. According to him, in its previous forecast the central bank did not account for strikes by the occupiers on warehouses and supermarkets. As the deputy governor noted, changes and restructuring of routes and rising delivery costs could add about 0,4−0,6% to the annual price increase by the end of 2026-th. Moreover, the main part of this effect will manifest in the autumn. And damage to a warehouse or distribution center does not automatically translate all losses into shelf prices. Logistics and storage account for about 8% of the average consumer cost, and under competition, businesses can pass only a portion of additional costs to final prices. At the same time, the NBU does not expect a sharp jump in prices. Lepushynskyi emphasized that the price increase will be gradual and that part of the additional costs the business will not be able to pass on to consumers. “There is no talk of a sharp jump in prices: the effect will be stretched over time,” explained the National Bank representative. As a result, if in July the annual inflation was 7,7%, now it is expected to be at 8,1−8,3%. Earlier, Ukraine’s Minister of Agricultural Policy and Food Taras Vysotsky predicted price growth for food due to occupier strikes on logistics of about 2,5% and without a threat of a shortage. Photo Pixabay