Ukraine’s annual consumer inflation rate decelerated to 7.2% year-over-year in June (meaning the rate of price increases slowed down), while core inflation rose to 8.1%, showing the war in the Middle East continues to put strong pressure on prices in Ukraine.
Monthly inflation shows a strong deceleration: consumer inflation decreased from 0.9% in May to -0.1% in June, and core inflation, which excludes volatile components, also decreased from 0.7% in May to 0.5% in June.
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The latest report published by the State Statistics Service on Thursday again showed uneven price dynamics, with headline inflation decelerating and core inflation slightly increasing for the third consecutive month.
Logistics costs are not decelerating significantly after the spike caused by the war in the Middle East. The annual rise in fuel prices reached 33.4% year-over-year in June. Transportation services became even more expensive, accelerating to 23.1% in annual terms.
Road passenger transport prices accelerated by 0.7% for another consecutive month to 24.1%, while railway passenger transport fell to 12.9%.
The top 5 winners in monthly inflation acceleration are, surprisingly, not food.
Water supply led all price increases in June, jumping 15.3% against May, followed by sewerage at 14.6% – both the result of tariff revisions rather than market dynamics. Rail passenger transport came third with a 3.4% rise, ahead of garbage collection at 3.0%.
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Tobacco products rounded out the top five, adding 1.8% on the month, just ahead of sunflower oil at 1.7%.
Logistics and state-regulated prices are still elevated compared to May
Fuel and transport prices keep rising, leaving average transport inflation almost the same as the previous month – 19% in annual terms. In response to higher fuel prices, passenger transport across the country became more expensive.
Alcohol and tobacco prices are up 16.5% year-on-year, even 0.3% higher than a month before. Alcohol added 0.8% on the month, while tobacco added the same as last month – a 1.8% rise.
How have inflation trends for food and other non-food categories changed since April?
Prices for food and non-alcoholic beverages declined 0.8% in June compared with May, but decelerated 5.6% annually – which shows more satisfying dynamics than other categories. This made groceries the main driver of the overall monthly decline.
The drop was concentrated in the dairy and egg segment, which cheapened by 5.0% – almost entirely due to eggs, which collapsed 27.8% on the month. Milk slipped 0.5%, while cheese and cottage cheese prices stayed flat. Vegetables followed with a 3.7% decline, fruit fell 1.3%, and sugar lost 0.8%.
Other staples moved in the opposite direction. Fish and fish products rose 1.6%, pasta added 1.5%, and bread climbed 1.0%, lifting the broader bread and bread products category by 0.4%. Oils and fats gained 0.7% overall: sunflower oil rose 1.7% and butter 0.5%, while other edible animal fats declined 1.5%. Meat and meat products were unchanged against May.
Non-alcoholic beverages edged up 0.5%.
Housing and utility costs rose 0.9% in June, driven almost entirely by administrative decisions: water supply tariffs jumped 15.3% and sewerage 14.6% in a single month. Electricity, natural gas, hot water and heating tariffs stayed flat, as they have throughout the year.
Healthcare costs rose 0.3% in June against May, driven by outpatient services, which added 1.0%. Prices for pharmaceuticals, medical goods and equipment stayed flat on the month.
Household goods, appliances and routine home maintenance edged up 0.2%. Household appliances rose 0.8%, while furniture, furnishings, carpets and other floor coverings added 0.4%. Home textiles moved against the trend, cheapening by 0.9%.
The growth in prices in restaurant, cafe, and fast food services was merely 1%.
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