Inflation in Ukraine is accelerating again: rising food prices come to the fore
According to the results of May, Ukraine recorded another increase in price growth, which once again calls into question the previous forecasts of economists and state institutions. According to the State Statistics Service, the inflation rate in May was 1.3% compared to April this year, while in April it was 0.7%. This indicates a short-term acceleration of price growth. What is even more worrying is that annual inflation increased to 15.9% compared to 15.1% in April and reached its maximum since April 2023, when the rate increased to 17.9%. Such dynamics do not correspond to the previously set indicators in the state budget and the forecasts of the National Bank, which, according to the updated forecast, expects the inflation rate in 2025 to be 8.7%, and according to the IMF - about 9%. The focus of the price increase is food products. Over the year, average food prices in our country increased by 22.1%. Eggs rose the most significantly — by 86%, which was a consequence of difficult weather conditions this spring, depreciation of foreign exchange reserves and active exports. Vegetables became more expensive by 35.7%, sunflower oil by 35.4%, fruits by 33.5%, butter by 28.5%. A little steadier — prices for bread, which rose by 22.3%, milk by 20.9%, soft drinks by 19.7%, and fermented milk cheese by 18%. In the meat and fish segment, prices also increased — by 18.2% and 13.3%, respectively. One of the main factors that contributed to the acceleration of food price growth in May is the rapid rise in prices for raw food products due to adverse weather conditions and active exports, the National Bank explains. This is also confirmed by the State Statistics Service, according to which in May prices for food and non-alcoholic beverages increased by 2.8%. In particular, fruits experienced a significant increase - they added 17.6% to the price in May alone and 39.1% since the beginning of the year. At the same time, pork, lard, poultry, beef, fish and fish products, vegetables, pasta and sugar increased significantly in the price spectrum. The price tags for oil, milk and rice changed little - their level remained almost constant. The negative dynamics in the food sector are manifested not only in price growth, but also in the financial volumes that Ukrainian consumers spend on food every month. For example, according to the National Bank, the average Ukrainian spends about 40% of their income on food, while in European countries this figure usually ranges from 12 to 18%. This means that Ukrainian families are forced to spend a much larger share of their family budget on food purchases, which creates additional pressure on their financial situation. The main reasons for such a price increase are insufficient state regulation of the agricultural sector, low subsidies and high tax rates. Unlike EU countries, where up to 70% of farmers' income is subsidized by the state, in Ukraine support for farmers is mostly formal and bureaucratically complicated, which does not produce the desired effect. As a result, the price of products, in particular the most important ones - bread, dairy and meat products - is growing rapidly, and this trend will continue, since the problems in agriculture were exacerbated during the war. Why is the price increase becoming even more noticeable? The main factor is war. It became a catalyst for price increases, including for food. In the first year of full-scale hostilities, inflation in the country reached more than 26%, which significantly devalued the incomes of the population, especially pensioners and state employees. Over time, the situation partially stabilized, but since 2024, the pace of price growth has begun to accelerate again. In 2024, the inflation rate was 12%, but in the period 2024-2025, the process still remains unbalanced. The war has also significantly affected food prices, which during its active phase in early 2022 increased by 41.6%, especially for fruits, vegetables and cereals. In 2023, inflation in this category reached another 31.5%, and among the reasons are the deficit of domestic production and the emergence of imported goods on the markets, which adds even more pressure on pricing. Experts and government agencies have cautious expectations for the future. They are confident that price growth will stabilize in the second half of this year, although they do not rule out the possibility of short-term fluctuations. The National Bank claims that inflationary trends are decreasing and predicts that by the end of the year the indicator may drop to 8.7%, given that in May this indicator was the maximum for the current period. Seasonality and stabilization measures, in particular, the stability of gas and electricity prices, play an important role in this perspective. At the same time, many experts warn that the situation remains unstable, and the coming months may bring new challenges and unexpected price fluctuations.