Why inflation accelerated again
One of the reasons was shift in crop seasonality. Because of this, the price of vegetables in the borscht set rose faster than expected. At the same time, the prices of meat, eggs, apples and some other fruits decreased.
Another factor was the increase in the cost of certain regulated services. In particular, tariffs for water supply and drainage, as well as transport fares, increased in July.
Products: what is getting more expensive and what is getting cheaper
Raw food products in annual terms rose in price by 2.2%. At the same time, the dynamics within the category were heterogeneous.
The vegetables of the borscht set have become more expensive due to the peculiarities of this year's offer. At the same time, meat, eggs, apples and some fruits became cheaper.
In the category of processed products, the rate of price growth slowed to 10% year over year. Slower increase in the price of sausages and confectionery was a restraining factor. At the same time, sunflower oil continued to rise in price.
Fuel remains one of the main factors
Fuel inflation in July slowed down to 28% in annual terms. However, it still remains one of the most visible sources of price pressure.
At the beginning of the month, the situation was relatively stable, but in the second half of July, gasoline and diesel prices began to rise due to increase in world oil prices.
Rising fuel prices also indirectly affect other goods and services, as they increase transportation, logistics, and production costs.
Services and imports are also becoming more expensive
Inflation of services remained at the same level in July 13.7% year over year. Prices in restaurants, fast food establishments, hotels and certain medical services grew more slowly.
At the same time, the price of taxis, transport services, and housing rent increased. Their value is affected, in particular, by high fuel prices and construction costs.
Prices for non-food products increased by 0.8% year-on-year. One of the factors was the transfer of the effect of the weakening of the hryvnia to the cost of imported products.
What the NBU predicts
The National Bank expects that In the second half of 2026, inflationary pressure will increase. According to the basic forecast, at the end of the year, inflation may be close to 10%.
Prices will be affected by an increase in budget expenditures, an increase in business costs for labor, more expensive energy sources and new water tariffs.
At the same time, part of the pressure should be compensated by the moratorium on the increase of individual utility tariffs, the increase in harvests and the gradual improvement of the situation in the energy sector.
When inflation may return to 5%
The NBU predicts that in Inflation will slow down to 6.9% in 2027, and in 2028 will approach the target indicator 5%.
However, the speed of return to this mark will depend not only on domestic prices, but also on the situation with energy, budget expenditures, harvests, the hryvnia exchange rate, and world energy prices.
Thus, the July acceleration of inflation does not yet mean an uncontrollable jump in prices, but indicates that goods and services will not become cheaper in the coming months.
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