Ukraine Annual Inflation Decelerates for First Time After Fuel Price Spike

Ukraine’s annual consumer inflation decelerated to 8.2% year-over-year (y-o-y), while core inflation rose to 7.9%, showing the war in the Middle East continues to put strong pressure on prices in Ukraine.

The new report published by the State Statistics Service on Tuesday showed uneven price dynamics – it is very early to say whether the peak of the price shock is over in Ukraine or whether price pressure will persist longer.

Monthly inflation may signal relief for the economy: consumer inflation decreased from 1.4% in April to 0.9% in May, and core inflation, which excludes volatile components, also decreased from 0.9% to 0.7% in May compared with the previous month.

The yearly price comparison in the report shows only a light relief, not an overall easing of price pressure. Consumer inflation decelerated from 8.6% a month before – but core inflation accelerated to 7.9% year-over-year (y-o-y) from 7.6% a month earlier.

The key driver of price pressure is, again, logistics costs, caused by the war in the Middle East. The annual rise in fuel prices reached 38.7% year-over-year. Road passenger transportation prices rose for more than 3% for another consecutive month – to 23.4%, while railway passenger transportation increased to 15.1%. That raised the whole transportation service by 2.5% to 22.6% in annual terms.

Among food prices, which make up the majority of Ukrainians’ consumer basket, fish and fats ended in the top-5 categories for price increase, as did tobacco.

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Ukraine’s central bank, the National Bank of Ukraine (NBU), wrote that inflation in May exceeded its April 2026 inflation report forecast. In its May 2026 Inflation Update, the NBU wrote that the deviation is caused by “acceleration in the rise of prices for processed food products and services, driven by higher business costs for energy, wages, and logistics”.

(Graph by Olena Hrazhdan / Kyiv Post)

Logistics and state-regulated prices are still elevated compared to April

Fuel and transportation prices keep rising, dragging the average transportation inflation to 20% in annual terms. In response to higher fuel prices, passenger transportation across the country became more expensive. These are included in the calculation of core inflation, which led to the higher figure.

Fuel inflation is also driven by the low-base effect, according to the NBU. “Gasoline prices continued to rise in monthly terms, while diesel fuel and LPG prices fell,” Ukraine’s central bank wrote.

Growth in administered prices accelerated to 10.2% year-over-year, the NBU estimated. The slowdown in price increases for tobacco products, which are also included in these estimates, paused, it wrote.

Ukrainians paid for both alcohol and tobacco products 16.2% more compared to last year. While alcohol increased moderately by approximately 5% this month and last month, tobacco keeps getting more expensive by 24.6% (almost the same as last month in annual terms).

How did inflation trends for food and other non-food categories change from April?

Raw food prices, which were once to blame for a 2024 inflation spike in Ukraine, have “slowed considerably” in May, according to the NBU, while processed food prices became slightly elevated.

In monthly terms, prices for food and non-alcoholic beverages rose by 1.2%, 7.9% annually.

Fruit rose the most, by 11.1% – a regular seasonal change month-over-month.

Prices for processed cereal products, bread, sunflower oil, pasta, fish and fish products, non-alcoholic beverages, beef and sugar increased by between 6.4% and 1.2%.

Eggs plummeted by 15.3%, while prices for vegetables, milk, pork, butter and salo (cured pork fat) fell by between 1.7% and 0.2%.

“Pork prices continued to rise more slowly thanks to an increase in domestic and imported supplies. Chicken prices also grew more slowly, while egg prices declined as domestic supply expanded,” the NBU wrote, commenting on the change.

Clothing and footwear became cheaper by 1.8% last month (even cheaper by 5.3% year-over-year).

Ukraine’s state statistics agency began estimating changes in rent prices – they increased by 8.9% year-over-year in May, while maintenance costs rose by 5.5% year-over-year.

Service prices are also under pressure.

“Services inflation accelerated somewhat in May to 13.6% yoy, spurred by further growth in businesses’ costs for fuel, labor, and electricity. Certain transportation services continued to rise in price at a faster pace, including goods transportation, car maintenance, and driving courses, as did recreation and beauty services. At the same time, the growth in prices for taxi rides and restaurant, cafe, and fast food services halted,” the NBU wrote.