Inflation Reached 8.1% in August, Fuel Prices Increased by 38.7%

Inflation in August exceeded the NBU's forecast, reaching 8.1% year-on-year. The main reasons are the rise in fuel prices and the increase in tariffs for water supply and drainage. The increase in fuel prices accelerated to 38.7% year-on-year, which is linked to a sharp rise in gasoline and diesel prices at the end of July. In August, gasoline continued to rise in price, while diesel prices increased due to shortages, but the situation stabilized in the second half of the month due to increased imports. The food market showed different trends: the new harvest kept vegetable prices in check, while meat prices fell due to low demand. Dairy products continued to rise in price due to increased procurement costs for milk. Administratively regulated prices also increased due to rising costs of public transport and water supply. The NBU notes that inflationary pressure remains high due to Russian attacks on infrastructure, which increases business costs. It is expected that with a balanced monetary policy, inflation will return to a slowdown by 2027.

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