Ukraine’s annual consumer inflation rate accelerated to 7.7%, while core inflation held at 8.1%, showing the war in the Middle East, devastating Russian ballistic strikes, and the halt of the Black Sea corridor – also caused by Russian strikes on vessels – are making the pace of price increases stickier and more persistent.
Monthly inflation shows uneven dynamics again: consumer inflation rose to 0.3% in July, while core inflation, which excludes volatile components, decelerated to 0.3% in July.
But annual data shows core inflation held steady this month and refused to back down, while consumer inflation began accelerating slightly. Volodymyr Lepushynskyi, deputy governor of the National Bank of Ukraine (NBU), previously said preliminary July data pointed to a reversal of the inflation trend, and warned there is a risk inflation stays stuck above the NBU’s 5% target for an extended period.
The latest report was published by the State Statistics Service on Monday.
Logistics costs have kept accelerating substantially for a third consecutive month, following the spike caused by the war in the Middle East.
Fuel prices rose 28% year-over-year in July – only a slight sign of deceleration from June’s 33% increase. Transportation services, meanwhile, rose 28.9% annually, up from 23.1% in June, an even stronger acceleration.
In its July 2026 Inflation Update, Ukraine’s central bank, the National Bank of Ukraine (NBU) wrote prices were relatively stable in the first half of July. Then, a fresh spike in global oil prices drove up both gasoline and diesel prices in the second half of the month; autogas price growth was more moderate.
Road passenger transport prices rose 6% month-over-month for a second consecutive month, bringing teh annual rate to 30.8%, while railway passenger transport rose 2.8% on the month and 15.5% annually.
The reversal was driven less by food, which continued to soften, and more by state-regulated tariffs and transport services, both of which accelerated sharply from June’s pace.
Water supply led all monthly price increases in July, surging 31.9% from June, followed by sewerage at 29.8% — both continuing the sharp tariff revisions that began the month before. Road passenger transport came third, ahead of transport services overall, and garbage collection, which rose 5.1%.
How have inflation trends for non-food categories changed since June?
Services inflation held at the previous month’s rate of 13.7% year-on-year, the NBU estimated. Restaurant and fast-food prices grew more slowly, which the central bank linked to ample food supply, alongside hotel and some medical services. At the same time, taxi and passenger transport services grew faster amid high fuel prices, while rising construction costs and internal migration continued to push up housing rental prices.
The state statistics data showed utilities saw the steepest acceleration. Water supply tariffs more than doubled June’s already sharp 15.3% rise, while sewerage tariffs accelerated from 14.6% the month before. Together, they pushed housing, water and energy costs up 1.6% on the month, compared with June’s 0.9% increase.
Garbage collection fees rose a further 5.1% in July, up from 3.0% in June, for a 16.2% annual increase. Electricity, natural gas, and hot water and heating tariffs stayed flat, as they have all year.
Alcohol and tobacco products rose 1.5% in July compared with June, edging up from a 1.4% gain the month before, and are now up 16.2% year-on-year — unchanged from June’s annual rate.
The two categories diverged sharply. Tobacco products drove most of the increase, rising 1.8% on the month and accelerating to 23.6% year-on-year, up from June’s already elevated pace. Alcoholic beverages rose more modestly, up 1.1% in July, and remain far less inflated on an annual basis, at 6.5%.
Household goods and appliances rose 0.3% in July, unchanged from June, with furniture up 0.9% and appliances up 0.3%. Healthcare costs rose 0.6%, up from June’s 0.3%, driven by pharmaceutical prices turning positive after months of decline, according to the State Statistics Service.
Communication prices edged up 0.3%, similar to June’s pace. Recreation and culture rose 0.7%, slightly ahead of June, led by 0.9% month-over-month increase in audio and photo equipment prices.
Education inched up 0.1%, easing from June’s 0.3%. Restaurants and hotels rose 0.8%, matching June’s rate. Miscellaneous goods and services gained 0.9%, unchanged from June.
Non-food goods prices accelerated somewhat to 0.8% year-on-year, which the NBU attributed to the pass-through of the hryvnia’s earlier weakening onto the prices of imported goods.
How have inflation trends for food categories changed since June?
Food and non-alcoholic beverage prices fell 0.2% in July compared with June, while the annual rate accelerated to 6.5% from 5.6% the month before.
The dairy and egg segment continued to soften, down 0.2% on the month. Eggs remained the sharpest mover, falling 6.0% in July, and now down 25.4% year-on-year. Milk and cheese moved the other way, rising 0.7% and 0.9% respectively.
Vegetables extended their slide, dropping 5.9% in July against a 3.7% decline in June – a seasonal deceleration tied to the new harvest. Fruit swung sharply in the opposite direction, jumping 1.5% in July, though it remains 9.5% cheaper than a year ago.
Raw food inflation resumed its climb, rising 2.2% year-on-year, the central bank wrote. Borscht-set vegetables led the increase, as this year’s harvest began arriving in June rather than July, unlike a year earlier.
Processed food prices, as expected, slowed to a 10% annual pace, with sausages and confectionery products the biggest contributors to the deceleration. Sunflower oil was the exception, continuing to climb.
Oils and fats rose 0.5% on the month, down from June’s 0.7% gain, with sunflower oil up 1.2% and other edible animal fats down 0.6%. Butter held flat in June. Bread and bread products rose 0.1%, while fish and fish products climbed 1.3%, similar to June’s pace, and remain up 22.4% year-on-year — the food category’s fastest annual increase. Meat and meat products fell 0.6% in July after being unchanged the month before. Sugar rose 0.6% after a 0.8% decline in June.
Non-alcoholic beverages accelerated to a 1.1% monthly gain, lifting their annual rate to 9.8%.
What’s next for inflation in 2026 and 2027?
The central bank expects inflation to keep accelerating in the second half of 2026, reaching 10% by year-end. It cited significant budget spending, rising labor costs for businesses, secondary effects from higher energy prices and the hryvnia’s earlier depreciation, and further water and sewerage tariff increases in several cities as the main pressures. A moratorium on raising tariffs for certain housing and utility services, along with the NBU’s monetary policy measures, will help contain price growth, the bank wrote.
The NBU’s forecast points to a deceleration to 6.9% in 2027 and to its 5% target by 2028, supported by a gradual narrowing of budget deficits, easing pressure on the labor market, expected harvest gains, and an improving energy situation as security risks recede.