When the National Bank speaks of "secondary effects from increasing business wage costs," it's worth understanding it more simply: employers are raising wages because they're competing for workers amid a labor shortage, and then they're laying these costs into the price of goods and services. In other words, wages went up — but you can buy the same amount or less with them.
That's precisely why the NBU worsened its inflation forecast for the end of 2026 to 10% from 9.4%, and core inflation — to 9.2%. This is not a one-time spike due to exchange rates or fuel, but what the regulator calls a "sustainable trend" — growth in business costs for logistics, wages, and energy resources.
Why This Is Not Temporary
In June, consumer inflation slowed to 7.2% — thanks to greater supply of vegetables and fruits. But core inflation, which doesn't depend on seasonal fluctuations in food prices, continued to accelerate to 8.1% and has already exceeded the NBU's own forecasts. This is a signal: price increases are affecting not only food, but systematically — services, industrial goods, everything that contains a share of human labor.
Inflation expectations overall were stable, but remained elevated
In simple terms: people and businesses have already gotten used to factoring into their calculations that prices will continue to rise — and this is precisely the mechanism that makes inflation self-sustaining.
Who Pays for the Labor Shortage
The labor market in Ukraine is one of the most distorted in Europe: mobilization, emigration abroad, population loss in occupied territories. Businesses are forced to raise wages to retain or find workers, especially in logistics and manufacturing. But this increase doesn't appear out of thin air — it falls on the final consumer through prices.
The NBU forecasts that pressure will only begin to ease in 2027, when "easing of pressure on the labor market" is expected — meaning the situation with staffing will stabilize, rather than improve dramatically.
What This Means for an Ordinary Person
If your salary has nominally increased this year — it doesn't necessarily mean you've started living better. The NBU is essentially acknowledging: the 5% inflation target that the regulator promised by the end of 2028 is now being pushed back a year further than expected in the spring. The question is not whether wages will grow — but whether they will outpace the rate of price increases for goods and services in your specific sector.
If pressure on the labor market doesn't begin to ease in the second half of 2026, as the NBU forecasts, will the regulator have to revise its target again — this time until 2029?
