Industrial inflation reached 52%: what it means for business and consumers
24 April 22:30
In March 2025, the producer price index for industrial products in Ukraine increased by 0.7% compared to the previous month. The most worrying is the annual figure: compared to March 2024, industrial inflation was 51.9%, significantly exceeding the February level, when it was 37%, "Komersant Ukrainian" reports, citing data from the State Statistics Service.
This indicates an increase in price pressure in the industry, which has both local and global causes.
The key driver of price growth was energy. The cost of supplying electricity, gas, steam and air conditioning rose by a record 206.4% year-on-year. This unprecedented increase is creating serious difficulties for producers, especially in energy-intensive industries such as metallurgy, chemicals, construction materials and agro-processing.
According to Danylo Hetmantsev, Chairman of the Parliamentary Committee on Finance, Taxation and Customs Policy, Ukraine’s economy is under sustained pro-inflationary pressure, driven by both external and internal factors. He explains:
“The war is a factor that increases the burden on all levels of the economy. We have a double deficit – budget and current account – financed mainly by international support. At the same time, businesses are facing a sharp rise in energy, logistics, and labor costs, as well as instability in supply chains.”
In March 2025, consumer inflation was also on the rise. According to official data, prices rose by 1.5% over the month, and the annual rate reached 14.6%. Thus, inflationary processes in the industry are already moving to the retail segment and are beginning to hit the wallets of Ukrainian citizens.
Experts emphasize that such a high level of inflation in the industry is not only a macroeconomic problem, but also a challenge for Ukrainian businesses, which are forced to revise production programs, cut investment plans or even shut down certain production facilities. In the long run, this may affect employment, the competitiveness of Ukrainian products, and economic growth in general.
At the same time, the government emphasizes that the situation is under control.
“The budget financing needs for 2025 have been met, and we have the resources to maintain macroeconomic stability, including through sufficient international reserves,” Hetmantsev said.
According to economists, industrial inflation will remain high in the second quarter of 2025. It is expected that over the next two months, the annual rate could rise to 55-60%, unless there is a significant decline in energy prices or an easing of geopolitical pressure.
Given the ongoing war and the energy vulnerability of the Ukrainian economy, industrial inflation remains one of the key challenges for government policy. To mitigate its effects, the government should promote energy efficiency, support critical industries, and continue active cooperation with international partners to finance budgetary needs and modernize energy infrastructure.
Read also: “A time bomb”: The Ministry of Finance has not yet reached an agreement with GDP warrant holders
What you need to know about inflation in Ukraine in 2025
Inflation in Ukraine in 2025 remains one of the key economic challenges. Amid the ongoing war and global economic turmoil, rising prices affect both the consumer and industrial sectors.
Current situation
According to the State Statistics Service, annual consumer inflation reached 14.6% in March 2025, up from 13.4% in February. Core inflation, which excludes volatile components such as food and energy, was 12.4%.
Forecasts and expectations
The National Bank of Ukraine (NBU) revised its inflation forecast for 2025, raising it from 8.4% to 8.7%. However, the regulator expects inflation to slow down in the second half of the year, especially in the third quarter, due to the expected increase in harvests and stabilization of food prices.
NBU Governor Andriy Pyshnyi noted that underlying inflationary pressures will gradually ease under the influence of monetary policy measures, improved electricity supply, and moderate pressure from the labor market. An additional deterrent will be the decline in oil prices amid global trade confrontations.
In 2026, the NBU plans to achieve its inflation target of 5%.
Impact on the economy
High inflation puts pressure on the country’s economy. In particular, rising energy prices increase production costs, which may reduce the competitiveness of Ukrainian goods on foreign markets. In addition, inflation reduces the purchasing power of the population, which may slow down domestic demand.
At the same time, the NBU maintains its key policy rate at 15.5%, seeking to maintain currency market stability and control inflation expectations.
According to economic experts, inflation in Ukraine in 2025 remains a significant economic challenge. However, the measures taken by the NBU and the government are aimed at stabilizing prices and achieving targets in the medium term. The key factors in this process will be the successful implementation of monetary policy, improvement in the energy sector, and stabilization of global economic conditions.
Читайте нас у Telegram: головні новини коротко
