Food items rose 1.4% over the month, with fruit (4.4%) and vegetables (6.6%) the most, due to seasonal factors. At the same time, the expanding supply of food products and weak consumer demand restrained prices for most food group products. Prices for sugar decreased by 0.2%, and bread and bakery products were unchanged (+0.1%). Meat, fish, cheese and sunflower oil went up by less than 1%. As for non-food products, the price went down by 5.9% for clothing and 4.2% for footwear.
Inflation was restrained in January by unchanged housing tariffs and a 2% reduction in the price of fuel and lubricants. As a consequence, consumer inflation in annual terms slowed down to 26% (against 26.6% in December). Annual inflation remains at a level close to 26% for the last 4 months, indicating the stabilization of inflationary pressures.
In the coming months the annual inflation will gradually start to decline, reaching, according to the forecast of the NBU, 18.7% by the end of the year.
This will be facilitated by maintaining a fixed exchange rate, the arrival of significant volumes of international aid, non-issue financing of the budget deficit, fixed housing tariffs for households (at least until the end of the current heating season), maintaining relatively tight monetary conditions, still weak consumer demand, and a slowdown in global inflation.
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