The growth of consumer prices in Ukraine in March 2022 accelerated to 4.5% from 1.6% in February, 1.3% in January and 0.6% in December, the State Statistics Service (Gosstat) reported on Friday.
In March last year, inflation was 1.7%, so in annual terms, in March this year, it rose to 13.7% from 10.7% in February and 10% in January, the agency said.
Core inflation also jumped to 3.8% last month from 1% in February and 0.1% in January. Taking into account 1.7% in March 2021 in annual terms, it increased to 10.5% from 8.2% in February and 7.6% in January.
Since the beginning of this year, for its first quarter, inflation was 7.6%, base – 4.9%, said the State Statistics Service.
The National Bank of Ukraine, as its head Kirill Shevchenko said in an interview with Ekonomicheskaya Pravda, estimated inflation in March at 2.1%, in annual terms – 11.1%, and the base – 8.5%, indicating that deviations from the pre-war forecast (respectively 9.2% and 8.2%) – moderate.
According to the State Statistics Service, prices for food and non-alcoholic beverages rose by 6.2% in the consumer market in March. Most of all (by 21.3% and 15.5%) rose in price fruits and vegetables. Prices for rice, cereal products, sugar, lard, sunflower oil, fish and fish products, pasta, butter, milk, cheese and eggs, soft drinks, meat and other products increased by 9.8-3.5%.
Clothes and footwear went up by 13%, incl. clothing – by 13.3%, footwear – by 12.5%.
The increase in prices (tariffs) by 0.5% for housing, water, electricity, gas and other types of fuel was mainly due to an increase in prices for rental housing by 4.0%, maintenance and repair of housing – by 2.2%.
Prices in the healthcare sector rose by 5.6%, primarily due to an increase in the cost of pharmaceutical products by 8.1%.
The 4.2% increase in transport prices was mainly due to a 7.7% increase in fuel and oil prices.
As reported, in 2021, inflation in Ukraine rose to 10% from 5% in 2020 and 4.1% in 2019, the core inflation to 7.9% against 4.5% a year earlier.
Since the beginning of Russia’s armed aggression in Ukraine, hryvnia deposits of the population have grown by 19%, while deposits in foreign currency have decreased by 2%, said the head of the National Bank of Ukraine (NBU), Kyrylo Shevchenko.
“As for the outflow of deposits, on April 1, compared to the first day of the war, hryvnia deposits of the population increased by 19%. Deposits in foreign currency decreased by 2%,” he said in an interview with Economic Truth.
Shevchenko added that since the beginning of the active phase of the war, the funds of legal entities have decreased by 4% – in hryvnias and by 8% – in US dollars.
“We have no critical outflows from the system,” the head of the NBU summed up.
The gross domestic product of Ukraine in the first quarter of 2022 fell by 16% compared to the same period last year, the country’s Ministry of Economy estimates.
“Our forecast for GDP decline in the first quarter is 16%, and the annual decline could reach 40%,” First Deputy Minister Denis Kudin is quoted in a press release from the department.
He noted that those industries where remote work is impossible, in particular, aviation, maritime transportation, and the service sector, where businesses work directly with consumers, have suffered the most.
At the same time, Kudin pointed out that over the past 10 days, the economy as a whole has begun to recover, business in safe regions is returning to work, and farmers have begun sowing.
The ministry noted that in the process of economic recovery, special attention will be paid to supporting industries that directly provide for the livelihoods of citizens and strengthen the defense capability of the state. “We are talking about agriculture, food production, retail, utilities and energy services, industries working on mobilization orders,” the press release says.
According to the Ministry of Economy, Ukraine in March of this year exported 5.97 million tons of goods worth $2.7 billion, which is more than half the quantity and value indicators for February. Imports fell three times – to 1.6 million tons for $1.8 billion.
Ores, corn, ferroalloys and oil remained the main export items. The export of metals (including flat-rolled products – decreased by almost 10 times, to 47,000 tons) and agricultural products was especially affected, the ministry noted.
“For some metallurgy positions, exports were not made at all. This is primarily due to the physical destruction of metallurgical facilities and the stoppage of production,” the ministry commented.
In March, Ukraine exported 1.1 million tons of corn, 309 thousand tons of wheat, 118 thousand tons of sunflower oil, 40 thousand tons of soybeans. This is four times less than in February.
Currently, the most important imports are gas, oil, oil products and coal.
Given the closure of transit through the territory of Belarus and the Russian Federation, as well as an increase in the number of freight transport by road, a number of restrictions are being removed or adjusted from April 4, 2022, the Ministry of Infrastructure of Ukraine announced on its Facebook page on Monday.
According to the report, in particular, the period of validity of the electronic application for permits has been extended from seven to 10 days.
In addition, the following changes have been adopted for carriers: Poland – increased to five permits of all types per vehicle from April to May; Czech Republic – increased to two permits of all types but one vehicle up to 10 tons (for a month); Serbia – the restriction on travel across the country for vehicles up to 10 tons has been lifted; Romania – temporary registration of permits of the Organization of the Black Sea Economic Cooperation to Georgia, Azerbaijan, Kazakhstan, Uzbekistan for vehicles of the ecological standard Euro-3 and higher.
The Ministry of Infrastructure notes that from the very beginning of the war, it has been conducting systemic negotiations with partner countries on the abolition of the permit system for the period of martial law.
“As of April 4, we managed to agree on the cancellation of bilateral and transit permits for transportation through the territory of six countries of the European Union, in particular from Bulgaria, Hungary, Italy, Denmark, Latvia, Estonia, as well as through the territory of Georgia and Turkey. Slovakia also provided transportation without permits,” the report says.
In addition, as noted, a mechanism has been established for permit-free passage of all humanitarian cargo with Moldova, Romania, Slovenia, Austria, the Czech Republic, Poland, Germany, the Netherlands and Lithuania.
Spending on the payment of salaries in the public sector has been reduced by 10%, Prime Minister of Ukraine Denys Shmyhal has said.
“We have already reduced the total cost of wages in the public sector, except for the budgetary sector, meaning civil servants, not teachers and not doctors, by 10%. We have reduced costs by 10% in the Cabinet of Ministers, the President’s Office, the Verkhovna Rada,” Shmyhal said in an interview on the air of the national telethon on Friday morning.
The prime minister noted that the authorities intend, if necessary, to continue the trend to reduce the cost of wages in the public sector.
He also added that expenditures directly on the functioning of the government, parliament and the President’s Office have also decreased.
“Everything that can be abandoned, we do away with, and we redirect everything to the needs of the army and the Armed Forces,” Shmyhal said.
As reported, the Cabinet of Ministers has canceled the payment of labor intensity bonuses for the prime minister, ministers, their deputies and heads of regional and Kyiv state administrations until 2024.
The Ministry of Finance of Ukraine in March raised the forecast for payments on public debt in 2022 by UAH 4.93 billion compared to the March forecast – up to UAH 572.26 billion, according to the forecast for April on the agency’s website.
According to him, the largest amount of payments falls on April-June of this year – UAH 167 billion, while in August-September it is projected at the level of UAH 145.32 billion, in October-December – UAH 124.63 billion.
The Ministry of Finance estimates payments on domestic debt in 2022 at UAH 440.95 billion, and on external debt at UAH 131.32 billion.
According to the Ministry of Finance, on a monthly basis, the largest amount of payments fell on February – UAH 75.78 billion, and May – UAH 69.59 billion.
At the same time, the ministry increased the forecast of payments on public debt in 2023 by UAH 25.71 billion to UAH 400.91 billion.
In 2024, the ministry expects a payment in the amount of UAH 348.74 billion.
