Inflation in Ukraine: Rapid Price Growth in November 2024

In November 2024, consumer inflation in Ukraine accelerated to 11.2% year-on-year, a significant increase compared to October’s 9.7%. According to the State Statistics Service, the rate of price growth exceeded the forecast figures published in the October Inflation Report of the National Bank of Ukraine (NBU).

The main factor influencing the acceleration of inflation was the increase in food prices. According to the NBU, smaller-than-expected harvests of certain agricultural crops led to a reduction in supply and an increase in the cost of raw materials for the food industry. In particular, prices for borscht vegetables, cucumbers and apples increased faster due to the influence of weather conditions, such as a hot summer and autumn with long periods without precipitation, which negatively affected yields and quality.

It was also noted that administratively regulated prices rose somewhat faster than expected. This applied not only to food products, but also to other goods subject to state regulation. In particular, an increase in business costs, in particular for energy supply and labor costs, also contributed to the acceleration of inflation.

The increase in core inflation was another important aspect. In November, this indicator increased to 9.3% compared to 8.3% in October. The increase in core inflation was due to a higher increase in the price of processed food products, in particular flour, milk, cereals and eggs, which is due to the increase in the price of raw materials for their production, as well as an increase in the cost of energy.

At the same time, the increase in the price of processed food products was significantly influenced by an increase in production costs. For example, the prices of bread, flour and confectionery products increased due to an increase in the cost of their production. Dairy products became more expensive due to an increase in the purchase prices of milk and an increase in production costs.

Inflation has also affected certain imported goods, including coffee, tea, chocolate, fish and seafood. The cost of sunflower oil has increased significantly due to its rise in price on world markets, which was due to high export demand.

Rising costs for energy, raw materials and production continue to affect prices, which contributes to the increase in the cost of meat products, in particular pork and beef. As a result, the growth rate of prices for food and other goods remains high, which creates additional pressure on the country's economy.

Overall, the inflation situation in Ukraine in November 2024 showed that economic difficulties associated with climatic conditions and rising production costs significantly affect the price level, exceeding even previous forecasts by the NBU.