In April and May 2025, Ukraine experienced a rapid increase in consumer prices. According to estimates from the National Bank of Ukraine, inflation reached a local peak in May, exceeding previous expectations, with the annual inflation rate surpassing 15%.
This is reported by Finway
Main Factors Behind Price Increases
The primary reasons for the acceleration of inflation were the rising prices of raw food products. This was due to the residual effects of last year’s poor harvests, spring frosts, and seasonal changes in demand for certain goods. Additionally, inflationary pressure was supported by strong consumer demand and rising production costs in the business sector.
Forecasts and Potential Risks for the Market
The National Bank forecasts that in the coming months, the rate of price growth will gradually slow down. This is expected to be influenced by the arrival of the new harvest, an improved situation in the energy sector compared to last year, and a decrease in global oil prices.
“At the same time, the trajectory of inflation slowdown will largely depend on the impact of spring frosts and summer weather conditions on the supply and prices of agricultural products,” added the head of the NBU.
Deputy Head of the NBU Serhiy Nikolaychuk notes that even in the event of a repeat poor harvest this year, farmers will not be able to significantly raise the prices of their products, as this will be hindered by imports from neighboring countries. Already, prices for food products in Ukraine have approached, and in some cases even exceeded, levels in neighboring countries.
Meanwhile, market participants are warning of a potential rye shortage, which could lead to an increase in the price of rye bread and even force some producers to halt its baking. To this end, Ukraine has already begun processing Polish rye, and flour from the Baltic countries is increasingly being used in bread production.