Consumer inflation in Ukraine accelerates to 6.1% in January - NBU

“In January 2021, consumer inflation accelerated in annual terms to 6.1% (up from 5% in December). In monthly terms, prices grew by 1.3%. As expected, actual consumer inflation breached the upper bound of the 5% ± 1 pp target range. At the same time, it was slightly lower than projected trajectory published in the January 2021 Inflation Report issued by the NBU,” reads the report posted on the website of the central bank.

In January 2021, the growth in prices for certain foods, fuels, and tobacco products, along with further growth in consumer demand, generated pro-inflationary pressures. However, inflation was restrained by lower prices for natural gas. As expected, the January lockdown had little effect on price dynamics.

Core inflation accelerated to 5% year-on-year, up from 4.5% year-on-year in December 2020.

“Prices for processed foods rose more quickly (by 5.8% yoy). As in previous months, sunflower oil prices rose sharply due to lower sunflower yields and higher global prices for edible oils. This affected prices for mayonnaise and spreads that are made with sunflower oil,” reads the report.

Also, prices for nonfood products grew at a higher rate - 2.6% year-on-year. At the same time, the growth in services prices remained practically unchanged, at 6.8% year-on-year.

As reported by Ukrinform, the NBU projects that inflation at the end of 2021 will stand at 7%, but will return to the 5% ± 1 pp target range in H1 2022.

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