NBU: Logistics Changes After Strikes on Warehouses Are Driving Inflation

This was reported by Volodymyr Lepushynskyi, Deputy Governor of the National Bank of Ukraine, in a column for Interfax-Ukraine.

He noted that in July, consumer inflation accelerated to 7.7% year-on-year from 7.2% in June. In August, according to preliminary estimates, the acceleration continued. Overall, this was in line with the NBU’s expectations, although inflation turned out to be somewhat higher than the forecast trajectory. One of the reasons was new destruction that had not yet occurred when the July forecast was being prepared.

«According to our current estimates, the additional contribution from logistics restructuring itself and the related increase in costs could amount to around 0.4–0.6 percentage points of annual inflation by the end of 2026,» Lepushynskyi wrote.

According to the expert, the main part of this effect will be felt in the autumn.

«At the same time, there is no question of a sharp jump in prices: the effect will be spread over time and will be partially restrained by the competitive environment and weaker demand,» the NBU Deputy Governor predicts.

Damage to a warehouse or distribution centre does not mean that all losses are automatically passed on to shelf prices, Lepushynskyi explained. Logistics and storage account for around 8% of the average consumer price, while due to competition, businesses are able to pass only part of the additional costs on to final prices.