Ukrainian inflation surges to 15.9% as food prices spike

In May 2025, inflation in Ukraine accelerated to an annual rate of 15.9%, up from 15.1% in April. The country's State Statistics Service announced this rise on June 5, as food prices continued to exert significant pressure on the Consumer Price Index. This increase comes amidst several challenging factors, including the aftermath of last year’s drought, limited vegetable supply, and increased energy costs resulting from the ongoing conflict with Russia. Previously, inflation had hit 14.6% year-over-year in March 2025. The National Bank of Ukraine (NBU) noted during a press briefing that the inflation rate was slightly above their forecast trajectory for May, with core inflation rising by 0.5% since April. The NBU had previously maintained the key interest rate at 15.5%, indicating concerns about rising costs. One of the most notable contributors to this inflationary trend has been the food sector, where fruit prices surged by 17.6% due to the adverse impact of frosts experienced in April. These unusual weather events significantly affected the harvests, particularly early varieties of fruit and berry crops, leading to reduced supply and increased prices. Other food items also saw considerable price increases, including meat and meat products which rose by 5.4%, while alcohol and fish products experienced modest gains of 1.8% and 1.4%, respectively. Although housing, water, and energy costs had previously climbed sharply, they showed signs of stabilization with only a 0.1% increase noted in May. Prices for healthcare services and hospitality saw similar trends with minimal month-over-month increases of 0.6% and 1.5%, highlighting a broader deceleration in inflation growth across various sectors. Looking forward, the NBU has projected that inflation may decline to 8.8% by the end of 2025, primarily due to anticipated new harvests, stability in electricity supply, and drop in global crude oil prices. The various factors leading to heightened inflation over the past year continue to weigh heavily on consumer prices, thereby challenging the economic stability in Ukraine amid ongoing geopolitical tensions with Russia. However, if the weather remains favorable and other global financial conditions improve, there is cautious optimism about a possible slowdown in inflation going forward.