The State Statistics Service of Ukraine reported that in December 2020, inflation in the consumer market was at 0.9%. In its commentary, the National Bank of Ukraine noted that in December, inflationary pressures were shaped more dynamically than expected by the recovery of the world economy, increasing domestic consumer demand, as well as rising prices for energy and certain food products. At the same time, inflation continued to be restrained by the narrowing of demand from the population for certain services and non-food products.
According to the State Statistics Service, in December 2020, consumer inflation accelerated to 5% on an annualized basis, and on a monthly basis, prices rose by 0.9%. During the year, inflation was mostly below this range of 5% – it was restrained by the effects of the coronavirus pandemic and quarantine restrictions. Falling world energy prices, as well as declining demand for non-priority goods and services, have kept inflation low. The weakening of the hryvnia affected consumer prices with a certain time lag, the National Bank of Ukraine commented on the State Statistics Service.
In general, prices for processed food products for the year increased by 5.2%. Low sunflower yields and rising export prices led to higher sunflower oil prices in December. It also affected the cost of mayonnaise, margarine and spreads. Rising production costs have led to higher prices for meat, some dairy products and flour products. As a result of more active consumption and weakening of the hryvnia (on an annualized basis), prices for rice and fish products increased.
Non-food prices rose by 1.6% over the year, according to the State Statistics Service. “In December, their prices rose primarily due to the weakening of the hryvnia and significant consumer demand. In particular, the rise in prices for household appliances, pharmaceuticals and cars continued. In addition, the decline in electronics prices has slowed. Instead, the rate of decline in clothing and footwear prices has deepened. This may be due to weaker demand from the population due to opportunities for distance work and training, retailers’ pricing policies in the run-up to quarantine restrictions in January 2021, as well as cheaper fabric prices in the world due to declining demand”, noted the National Bank.
The cost of services for the year increased by 6.9%, accelerating slightly. This was due, on the one hand, to the increase in the cost of tourist services, rental housing and driving courses against the background of growing demand and production costs. On the other hand, the end of the weekend quarantine slowed down the growth of the cost of hotel services, beauty salons and cinemas.Data from the State Statistics Service
The growth of administratively regulated prices for the year was 9.9%. In December, they continued to accelerate. In particular, natural gas prices rose faster, which led to a reduction in the rate of fall in prices for hot water and heating. At the same time, prices for alcoholic beverages were equal to last year’s, as in 2020 excise duties and minimum retail prices for them did not increase.
Fuel fell by 10.5% over the year. However, in December, the annual decline in fuel prices continued to decline. This is due to rising world oil prices and the maintenance of significant demand from the population due to the advantage of using cars over public transport in a pandemic.
It will be recalled that in 2019, the growth of consumer prices in Ukraine slowed down significantly to 4.1%. Compared to 2018, this figure was 9.8%. According to the State Statistics Service of Ukraine, in 2017 the inflation rate was – 13.7%, in 2016 – 12.4%, in 2015 – 43.3%. In December 2019, compared to the previous month, deflation was 0.2% against inflation of 0.1% in November, and in October – 0.7%.
Translation: Evelina Susyk