Ukraine’s inflation might exceed 20% in 2022 due to the war
The National Bank of Ukraine (NBU) expects inflation to exceed 20% at year-end 2022 due to Russia’s full-scale assault on Ukraine. So far, inflation has reached 13.7% in March 2022.
The reasons for the rise in the prices of goods and services will include
• disruptions in production processes;
• logistical problems due to the temporary occupation of a part of the territory, destruction of the transport infrastructure, and, as a result, the uneven distribution of supply across some regions;
• weakening of the Ukrainian currency in the run-up to the war;
• high global energy prices that will put pressure on fuel prices and prices of goods and services with energy-heavy production costs.
“At the same time, measures taken by the NBU and the Ukrainian government will restrain the price growth,” the National Bank of Ukraine stated.