Cheaper or more expensive? What to expect from food prices in 2025.
The annual inflation in Ukraine increased by 12% over the past year, with a rate of 1.4% recorded in December compared to the previous month. This is confirmed by the data from the State Statistics Service of Ukraine. Prices for food products, housing and communal services, education, and healthcare have risen in 2024, while prices for clothing and footwear have decreased. Economists suggest that significant global factors played a major role in this. So, what will happen to prices going forward if these global factors remain unchanged?
Inflation in Ukraine: What the National Bank's data indicates
As noted by the NBU, inflationary pressure remains high. "In recent months, consumer inflation has accelerated to 11.2% year-on-year in November, and fundamental inflationary pressure has also increased to 9.3% year-on-year. These trends are due to a decrease in the supply of certain food products, a further rise in production costs, and the effects of exchange rate depreciation in previous periods," the NBU stated.
Meanwhile, Dmitry Churin, director of the analytical department at the investment company Eavex Capital, pointed out that the actual inflation rate of 12% for 2024 was above the NBU's forecast of 8.5%: "This is why the regulator raised the discount rate to 13.5% at the end of last year instead of further lowering it."
The actual inflation rate of 12% for 2024 was above the NBU's forecast of 8.5%
Therefore, according to his forecast, considering the data from the National Bank of Ukraine, inflation is expected to continue rising in 2025. This will be particularly felt in the first few months,
"Then it should start to decline unless some economic shocks occur. Currently, there is hope that inflation will not exceed 10% by the end of this year. It certainly won't approach the target level of around 5%," added Dmitry Churin.
0 How Prices for Goods and Services Changed in 2024
The main driver of price growth last year was the food basket of Ukrainians. According to the State Statistics data, prices for food products and non-alcoholic beverages in Ukraine increased by 14.1% in 2024 — in December alone, the prices in these categories jumped by 1.8%. Leading the growth are vegetables (+48.3%). Dairy products also saw price increases: butter rose by 33.9%, milk by 18.8%, and cheese by 16.2%.
Housing and communal service tariffs also increased (by 18.9% over the year)
Housing and communal service tariffs also increased (by 18.9% over the year, and by 0.1% in December).
Healthcare-related services became more expensive for Ukrainians (by 13.2%, with a 1.6% increase in December). Education costs rose by 12.0% (with a 0.1% increase in December). However, clothing and footwear prices decreased by 4.3% (with a 3.9% drop in December).
Change in Price Index in 2024
| Period | Price Index |
| January | 100.4 |
| February | 100.3 |
| March | 100.5 |
| April | 100.2 |
| May | 100.6 |
| June | 102.2 |
| July | 100 |
| August | 100.6 |
| September | 101.5 |
| October | 101.8 |
| November | 101.9 |
| December | 101.4 |
| Total for 2024 | 112 |
Source: State Statistics Service
Thus, in 2024, the consumer price index reached +12%. At the same time, experts do not believe that the official data from the agency accurately reflects the changes in the average check for Ukrainians.
1 5 Main Reasons: What Hinders the Slowdown of Inflation
Experts identify the increase in electricity prices for businesses and households by 63.6% in June 2024 as a significant factor putting pressure on prices.
"Many prices and services were revised due to this factor, as well as due to blackouts in the summer, which necessitated maintaining the energy independence of businesses," explained Andrey Shevchishin.
Experts identify the increase in electricity prices for businesses and households by 63.6% in June 2024 as a significant factor putting pressure on prices
Therefore, economists have listed the following as the top five inflation factors of 2024:
- drought and low harvests of vegetables, fruits, and grains;
- increased prices and shortages of electricity;
- devaluation of the hryvnia;
- rise in raw material costs;
- staff shortages and rising wages.
Prices for goods and services in January will also be pushed up by fuel costs, as the excise taxes on gasoline, diesel, and autogas have increased alongside the rise in oil prices. Additionally, price hikes for cigarettes, mobile services, and insurance should be expected.
Therefore, given the situation at the end of 2024, prices in 2025 will likely be no less surprising for Ukrainians.
2 "Prices for non-food items accelerated in growth, primarily influenced by exchange rate factors. This likely also impacted the slowdown in price reductions for clothing and footwear. Financial services and services in telecommunications, education, culture and recreation, restaurants and hotels, and personal care saw price increases at a faster pace, considering the rise in production costs," noted NBU analysts in the latest "Macroeconomic and Monetary Review."