Food prices in Ukraine and inflation dynamics: what to expect

In June 2023, Ukraine introduced a forced increase in electricity tariffs for households by 69.7%, which led to a 0.8% increase in consumer prices for the month. However, the annual inflation rate decreased to 12.8% in June, down from 15.3% a month earlier. These data are contained in the inflation report of the Ministry of Economy.

The Ministry of Economy expects the trend of gradual decline in annual inflation and, consequently, lower prices for products to continue, despite some monthly volatility.

The summer seasonality affected the market for milk and dairy products, where prices decreased by 0.5%, as well as the fruit and vegetable market, where prices decreased by 2.2%.

An increase in the number of poultry due to expanded export opportunities led to a 4.1% decline in egg prices. Temporary restrictions on agricultural imports stimulated a reduction in the price of processed cereals and sunflower oil, with prices falling by 3.4% and 2.4%, respectively.

However, the meat and meat products sector is experiencing an imbalance in supply and demand, which led to a 3.8% increase in prices for fresh, chilled and frozen pork, and a 2.3% increase in prices for beef and veal.

Also worth noting were a significant increase in local telephone tariffs (13.8%) and a rise in railroad transportation costs (3.1%).

In the first half of 2023, prices in Ukraine increased by 4.6%. Despite the temporary occupation of part of the territory and the destruction of fixed assets, Ukraine's economy continues to operate as a coherent mechanism. According to forecasts, the downward trend in inflation may continue, but the high level of food prices in the country remains relevant.