The NBU made a forecast on inflation for the coming months.

NBU: prices will rise, but inflation will slow down

The National Bank stated that price pressure will remain in the near future, but next year inflation will slow down.

"In recent months, inflation has expectedly accelerated. In August, consumer inflation rose to 7.5% year-on-year, which was close to the July forecast of the NBU. Fundamental price pressure, measured by the core inflation indicator, also intensified (6.5%)," the statement reads.

At the same time, the growth of consumer prices is explained by the impact of worse harvests this year, increased business expenses for food raw materials, energy, and labor costs, as well as the effects of the weakening exchange rate of the hryvnia in previous months. However, inflation expectations remained fairly stable, according to the NBU.

It is forecasted that inflation will moderately increase in the coming months due to the expansion of aggregate demand as a result of budgetary expenditures, increased business expenses on labor and electricity, and higher excise taxes.

"However, balanced monetary policy of the NBU and the reduction of external price pressure will contribute to a gradual slowdown in inflation and its return to the target of 5% in the coming years. To achieve the target, the NBU will, in particular, maintain a controlled situation in the foreign exchange market," the NBU asserts.