Prices continue to rise in Ukraine: NBU noted the reasons

Russia’s terrorist attacks on Ukraine’s energy sector are causing inflation to accelerate in addition to the power outage in the country. Therefore, inflationary pressures may increase in 2023. 1-2 percent pointsAccording to the press service of the Central Bank of Ukraine.

According to the regulator, inflation is already accelerating in Ukraine. The main factors behind the acceleration of inflation are the consequences of hostilities, which affected the increase in the production costs of enterprises, and the occupation of certain regions of Ukraine.

Everything in the future will depend on the scenario in which the situation in the energy sector develops. NBU is considering three options:

• Russian terror will continue, but the Armed Forces of Ukraine will be able to protect critical infrastructure. In this case, the electricity deficit will not exceed 25%;
• slow recovery and deeper infrastructure damage. In this case the deficit grows;
• major power outages.

At the same time, the Central Bank expects the cost of production to increase. Reasons:

• use of generators;
• fuel requirements;
• violations in technological processes.

Inflation will start to slow down as of the second quarter of 2023. This should be facilitated, first of all, by reducing security risks due to the successful actions of the Armed Forces of Ukraine.

Previously, it was learned that the Central Bank of Ukraine kept the discount rate at 25%. They said this would help strengthen monetary transmission, maintain exchange rate stability and gradually lower inflation in 2023.

Recall, on September 1, the Council of Ministers made a macroeconomic forecast for 2023. The Ministry of Economy has calculated that by the end of next year, the US dollar rate will reach UAH 50 and inflation will be 30.6%.