Ukraine consumer prices rise 0.2% in January

Ukraine’s consumer prices rose 0.2% m/m in January owing mostly to growing prices for food, housing and utilities, and alcohol and tobacco, the State Statistics Service reported on Feb. 10. Annual inflation slowed to 3.2% yoy in January from 4.1% yoy in December.

 

Food prices rose 0.5% m/m in January (after staying flat in December), driven mostly by vegetables (6.6% m/m), bread (0.4% m/m), and milk (0.4% m/m). At the same time, prices for eggs declined 1.5% m/m and sugar fell 1.1% m/m. In addition, prices for alcohol and tobacco advanced 0.8% m/m.

 

Prices for housing and utilities climbed 1.7% (vs. a 2.3% m/m drop in December) due to natural gas prices rising 10.7% m/m.

 

At the same time, prices for clothing and footwear declined 5.6% m/m (after a 3.4% m/m drop in December). On top of that, transportation prices slid 0.7% m/m due to a 4.0% m/m fall in prices for gasoline and a 1.5% price decline for railroad services.

 

Core inflation (the consumer basket excluding goods and services with the most volatile prices) decreased 0.2% m/m in January (vs. a 0.3% m/m slide in December).

 

Annual core inflation slowed to 3.3% yoy from 3.9% yoy in December.

 

Evgeniya Akhtyrko: The abnormally warm weather apparently resulted in reduced consumer demand for winter clothing and footwear, prompting sellers to cut their prices for these items.

 

The weak monthly consumer inflation in January brought annual inflation to a six-year low. The current annual consumer inflation of 3.2% yoy is now below the mid-term target of 4-6% set by the National Bank of Ukraine (NBU).

 

We forecast that consumer prices will increase 4.2% YTD in 2020 (vs. 4.1% YTD in 2019).