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Prices in Ukraine to rise by 6.3% in 2019, - National Bank

The reasons are the increase in tariffs for centralized heating and hot water, the growth of tariffs for gas for the population, the rise in the price of tobacco products and gasoline
18:41, 10 February 2019

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In 2019, prices in Ukraine would grow by 6.3% against 9.8% in 2018. This is stated in the Inflation Report of the National Bank of Ukraine (NBU).

The main factors that cause a rise in prices in 2019 are increases in tariffs and wages. This will increase the production costs of business and stimulate consumer demand.

In January, there was already an increase in prices for centralized heating and hot water by the main producers of thermal energy. It also assumes a further increase in gas tariffs for the population in accordance with the memorandum with the IMF.

However, the main contribution to inflation in the current year will be a rise in the price of tobacco products, which is estimated at 19%. In subsequent years, the growth rates of tobacco prices will remain high, although they will slow to 12%.

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The rise in the price of alcoholic products is projected at around 6-9% annually. A further annual increase in fuel prices (gasoline and diesel) is estimated at 4-5%.

However, the inflationary influence of these factors will gradually decrease, and in 2020 the price increase will slow to 5%.

Reducing inflation will be ensured by the tight monetary policy of the NBU and the low-key fiscal policy of the government with respect to significant volumes of planned repayments of government debt, the regulator promises. Also, low volatility of the hryvnia exchange rate and moderate rates of price growth for imported goods, including energy and food, will contribute to the slowdown in inflation.

In particular, gas tariffs, which directly affect heating and hot water tariffs, will be determined on the basis of import parity from 2020.

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