July inflation of 7.7% annually is not a single figure, but a sum of opposing movements that affect people's wallets differently depending on where they spend most of their income. State statistics show that food prices fell by an average of 0.2% per month, while utility tariffs and transport continue to rise at double-digit rates on an annual basis.
For a family that spends half its budget on food, July looks decent — eggs fell by 6%, vegetables by 5.9%, and pork and chicken also went down. But for those paying for water supply and transportation, the picture is different: the water tariff jumped 31.9% in a month, sewage by 29.8%, and road transport fares rose by 6%.
Utilities as hidden inflation
Annual growth in housing and utilities rates stands at just 4.5% — a figure that looks modest against the backdrop of 7.7% overall inflation. But precisely July's jump in water supply and sewerage by a third in a single month signals that utilities companies have begun compensating for years of frozen tariffs right now, rather than evenly throughout the year.
This means that the official annual figure for water tariffs does not yet reflect the full effect — it will manifest in the coming months when July's increase enters the comparison base.
Transport rises faster than fuel
A telling paradox: fuel and lubricants fell by 0.1% in a month, while road transport fares rose by 6%. This means that the rise in passenger transport costs is not related to gasoline prices, but to other factors — wage increases for drivers, labor shortages, or rising rental and insurance costs for carriers.
Annual growth in transport prices of 18.6% is one of the highest indicators in the inflation structure, and it continues to pressure people who commute to work daily, regardless of how much eggs cost at the store.
Core inflation (excluding raw products and regulated prices) rose to 8.1% annually — this is a more accurate indicator of where prices are heading under the influence of demand and business costs, rather than seasonal fluctuations in harvests.
What this means for the coming months
The National Bank has already worsened its inflation forecast, and July's data confirms why: seasonal falls in vegetable and fruit prices are a temporary effect that will disappear as autumn approaches, while utilities and transport tariffs establish a long-term trend.
If water supply tariffs rise in several more regions following July's jump, and transport companies continue to shift costs to passengers, then in autumn the overall inflation is unlikely to slow even with cheap vegetables — the only question is how quickly the National Bank will respond by raising the discount rate.
