In 2017, #Ukraine’s #consumer #prices rose above #expectations of the Ukrainian #Government and the #National Bank. At the end of December 2017, the #inflation rate was at 13.7%. Originally, it was assumed that the prices would increase by about 8%. At the same time, producer prices increased by 16.5%.
In particular, foods and non-alcoholic beverages jumped in price by 17.7% year-on-year and by 1.5% month-on-month. According to statistics, the biggest increase was seen in fruit prices which rose by 34.5% and in prices of meat and meat products showing a rise of 29.4%. A bigger-than-average increase was also seen in prices of vegetables (24.7%), milk (23.1%), eggs 21.2%, butter (20.6%) and bread 20.1%). Over the year, only sugar decreased in price by 7.4%.
There has also been a price rise for alcohol and tobacco products after recent tax increases. These were 20.7% more expensive year-on-year.
Footwear and apparel prices remained relatively stable last year with a modest increase of 0.9% and even declined 2.4% compared to November.
After 24.9% and 43.3% in 2014 and 2015 respectively as a result of a war-related massive devaluation of the national currency Hryvnia, the official inflation rate in 2016 first fell to 12.4%. Therefore, the rate of 13.7% at the end of 2017 was above the expectations of the Ukrainian government and the National Bank at the beginning of the year, which expected an inflation of about 8%. The primary reason for that could be the doubling of the minimum wage at the beginning of 2017 to UAH 3,200 (currently about EUR 94) and the generally rising wages due to massive labour migration.
2018 began with an increase in electricity tariffs for enterprises by 8-11%. At the beginning of the year, the minimum wage was also increased to UAH 3,723 (about EUR 110), which companies will most likely pass on to consumers in the form of higher prices.
For 2018, the government expects the inflation to be at 9%. The National Bank is even more optimistic about it and expects an inflation rate of 7.3% with tendency of further decrease in the following years.