Inflation in July remains at 2.4%

Consumer inflation in Ukraine in July 2020 amounted to 2.4% year-on-year, just as they did earlier in June 2020, the State Statistics Service reports.

Compared to the previous month, consumer prices in July fell by 0.6%, and increased 1.4% from year-start, the stats agency reported on its website.

On the consumer market, prices for foodstuffs and soft drinks were down 1.4% against June. Prices for eggs and vegetables plunged the most (15.1% and 15%, respectively).

Prices for pork, sugar, rice, sour cream, milk, and lard decreased by 1.1-0.4%. At the same time, prices for poultry meat, fruit, soft drinks, and bread went up by 2.1-0.3%.

Prices for alcoholic beverages and tobacco products increased by 0.5%, which is seen as due to a 1% rise in prices for tobacco products.

Read alsoUkraine's economy ministry estimates GDP decline in H1 at 6.5%

In annual terms, the highest price hike in July was recorded for fruit (33.7%), eggs (14%), alcohol and tobacco products (10.1%), as well as for water supply services (22.6%).

The largest decline in prices in July in annual terms was recorded for natural gas (-43%), fuel and oils (-21.5%), and vegetables (-13.9%).

The State Statistics Service recalled that the data on the occupied Crimea and Sevastopol, as well as the occupied territories in Donetsk and Luhansk regions, remains beyond the scope of research.

Inflation: Background

• The National Bank of Ukraine raised the inflation outlook for Ukraine in 2020 to 6% from 4.8% predicted earlier, while remaining within the target range of 5% +/- 1 pp.
• Inflation in Ukraine in 2019 slowed down to 4.1%, the lowest in the past six years.
• The International Monetary Fund has worsened the forecast for the fall of the Ukrainian economy in 2020 to 8.2% from 7.7%, which was released in April.
• According to its forecasts, the recovery of the Ukrainian economy after the recession caused by the coronavirus pandemic to pre-crisis indicators may continue until 2023-2024.
• The Ministry for Development of Economy, Trade and Agriculture, in an updated macro forecast for the next three years, predicts an increase in the gross domestic product of Ukraine in 2021 by 4.6%, and in 2022 and 2023 – by 4.3 and 4.7%, respectively.
• Since June 12, the National Bank of Ukraine has reduced the key rate to a historic low of 6% per annum.
• On July 23, 2020, the National Bank of Ukraine kept the key rate at the same level – at 6% per annum after reducing it in June for the eighth time in a row – to a historical minimum.
• On July 31, 2020, the National Bank of Ukraine estimated the GDP decline in Q2 2020 at 11% in annual terms.