Inflation out of control: NBU admits error in forecasts.

Inflation in Ukraine is growing faster than NBU predicted

Consumer inflation in Ukraine continues to rise and has already exceeded the forecasts of the National Bank. According to State Statistics, in October inflation reached 9.7%, which is a significant increase compared to September.

According to 'Minfin', NBU was forced to revise its forecast. Earlier, the regulator hoped that by the end of the year inflation would not exceed 8.5%, but now the forecast has worsened to 9.7%.

The highest price increase is felt in the food market. In October, food prices rose by 3.3% compared to the previous month - the highest figure in a year.

'Either there is a systematic mistake in the forecasting system at the NBU, or their forecasts were politically motivated,' says Vitaliy Shapran, former member of the NBU Council.

According to the regulator's updated forecasts, price pressure will continue to rise. The peak is expected in the first quarter of next year, when inflation could reach 11.4%. The main factors driving this increase are the situation in the food market, high wage growth rates, and energy problems.

'By the end of the year, inflation in Ukraine will be around or slightly above 10%. This is a low level, but it is still double the target,' Shapran predicts.

Experts call on the NBU to make a slight easing of monetary policy and gradually reduce the rate by 0.25-0.5 percentage points.

According to experts, the NBU's indecisiveness in monetary measures in the first half of the year has led to Ukraine not achieving either low inflation or vibrant economic growth.