Significant destruction of infrastructure facilities, the closure of enterprises, as well as the constant Russian terror, primarily of the civilian population, provoked an imbalance in the economy. Therefore, inflationary factors in wartime conditions continue to increase.
Inflationary processes will accelerate in Ukraine in the near future. Reason: economic recovery and growth in consumer demand, according to the Inflation Report compiled by the Ministry of Economy.
“Provided that there is no destruction of critical infrastructure in threatening volumes, it is likely that relatively restrained inflation rates will be maintained in the near future, but with their expected increase, determined primarily by the expansion of consumer demand in the context of the gradual stabilization of the economy,” the Ministry predicts.
It is noted that the significant destruction of infrastructure facilities, the closure of enterprises, as well as the constant Russian terror, primarily of the civilian population, provoked an imbalance in the economy (for example, in the labor market, in the energy sector, in providing enterprises with raw materials and materials). Therefore, inflationary factors in wartime conditions continue to increase.
At the same time, in January 2023, consumer inflation remained almost at the level of the previous month – 0.8% per month (0.7% in December 2022), and the annual rate slowed down to 26% (from 26.6%).
The Ministry of Economy believes that the current dynamics of consumer prices was determined mainly by all the main factors that were inherent in it in the last months of 2022. First of all, these are the dynamics of restrained demand and the consequences of regular attacks by the enemy on critical infrastructure with an emphasis on energy facilities and the ability of relevant services, businesses and the population to recover quickly.
How prices have changed during January 2023
According to the State Statistics Service, there were no strong changes in prices from December 2022 to January 2023. In general, the cost of products, goods and services rose by only 0.8%. For example:
food and non-alcoholic beverages increased in price by 1.4%; alcoholic beverages, tobacco products – by 0.8%; utilities – by 0.1%; household items, household appliances and housing maintenance – by 0.7%; health care – by 1.2%; communications – by 1%; recreation and culture – by 0.4%; education – by 1.1%; restaurants and hotels – by 1.6%; various goods and services – by 1, 8%.
But some things have gotten cheaper. For example:
transport by 0.1%; clothing and footwear – by 5.1%.
Earlier, Focus said that the NBU believes that inflation in Ukraine will begin to decline in the spring of 2023. So, in February, the head of the NBU, Andriy Pyshny, noted that the tight monetary policy of the National Bank, a decrease in world inflation and the subsequent adaptation of business would contribute to this.
Focus also reported that in 2023 the National Bank may decide to abandon the exchange rate fixed on the interbank foreign exchange market.
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