Food prices in Ukraine continue to rise, reflecting the impact of low yields, deterioration of raw materials and depletion of stocks last year. However, the National Bank of Ukraine (NBU) predicts a gradual improvement in the inflation situation until the spring of 2025, when the new harvest will slow down the rate of growth in prices for raw products.
In the second half of the current year, price growth exceeded expectations. The main reasons were: Low yield of vegetables and fruits. An increase in the cost of production, which increased wholesale prices. Rapid depletion of stocks since last year. An increase in food exports, which reduced the supply in the domestic market.
Such factors led to a noticeable increase in the cost of meat, dairy products and confectionery. Processed food prices rose 8.9% year-over-year, well above the 5.9% forecast. The drop in oil prices that was observed earlier was temporary. Now the prices of oil crops are rising again. The increase in the price of meat and dairy products remains stable, significantly influencing general inflation.
The National Bank of Ukraine predicts that the decline in inflation rates will begin in the spring of 2025 thanks to the new harvest. Food inflation is expected to decrease to 6% by the end of 2025. A further decrease is possible thanks to: Increasing production. Improvement of logistics chains. Stabilization of world food prices.
By 2026, food inflation may reach a minimum level of 3%. In the near future, prices for meat, dairy products, bakery products and other basic goods will remain high. However, the medium-term perspective shows that the situation will stabilize and the market will begin to restore the balance between supply and demand.
Consumers should prepare for temporary difficulties, but remain optimistic: the reduction in inflation will become real in two years.
