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Ukraine consumer prices drop 0.1% m/m in August

Ukraine's consumer prices dropped 0.1% m/m in August (while growing 16.2% yoy) owing to food prices, the State Statistics Service reported on Sept. 8. A month ago, July CPI increased 0.2% m/m (15.9% yoy growth). For 8M17, consumers inflation reached 8.1% YTD.


In August, food prices dropped 0.6% m/m (0.3% m/m growth in July) on the back of sliding prices for vegetables (-21.5% m/m) and fruits (-5.7% m/m). Utility prices eased to 0.3% m/m growth vs. 0.6% m/m in the prior month. Healthcare prices also slowed to 0.2% m/m growth vs. 0.5% m/m in July. Prices for clothing and footwear kept on falling (-2.4% m/m vs. -4.4% m/m in July).  Transportation prices sped up to 0.8% m/m growth from no growth in the prior month. Education prices inched up by 0.1% m/m vs. flat prices in July.


Alexander Paraschiy: August CPI was a bit strange since, subjectively, we did not observe declining prices for fruits and vegetables in supermarkets (we expected 0.2% growth in August). In September, we anticipate traditional inflation speeding up amid seasonally strengthening food prices. So we're not changing our initial CPI forecast of 11.8% YTD, or 14.0% yoy for 2017.


Despite the August deflation, we remain skeptical about the 2017 central bank inflation forecast of 9.1% growth YTD. This target could be reached if CPI grows no more than 0.3% on average per month through September-December, which is very unlikely amid rising food prices at the global markets.
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