Inflation in Ukraine in August 2025: what is happening to prices

In August, the rate of inflation growth slowed down – prices fell by 0.2% compared to the previous month, and annualized inflation was +13.2% (against +14.1% in July). The current inflation rate is still far from the NBU's third update of its 2025 target (+9.7%). The NBU's inflation forecasts are not highly accurate, with an error rate of more than 30% on the one-year horizon.

Inflation Factors. Currently, both pro-inflationary and disinflationary factors are exerting pressure on the inflation rate. Pro-inflationary factors – high growth in producer prices, weather conditions, significant fiscal deficit, increase in certain tax rates, partial recovery of pent-up demand.

Disinflationary factors – a significant slowdown in economic growth (real GDP grew by only +0.9% in 7 months of 2025 compared to the previous year), exchange rate stability (ensured by significant foreign exchange interventions by the NBU), a moratorium on raising a number of utility tariffs, and restrained demand due to uncertainty about military operations. In the coming months, the annual inflation rate is expected to decline slightly, mainly due to the statistical effect of the previous year's comparison base .

Structure of inflation. The variation in price growth for individual goods and services is over 40 percentage points, which indicates that non-monetary, situational, and administrative factors dominate the inflation dynamics. On the one hand, there is considerable pressure on prices from rising producer costs, but on the other hand, inflation is restrained by a moratorium on utility tariffs and artificially restraining the devaluation of the hryvnia.