Ukraine CPI speeds up to 1.8% m/m growth in March

Ukraine’s consumer price index (CPI) sped up to 1.8% m/m growth (15.1% yoy) in March owing to a 5.0% hike in utilities and 10.5% rise in clothing and footwear prices, the State Statistics Service reported on April 7. In the prior month, CPI grew 1.0% m/m (14.2% yoy), mainly on 1.5% m/m food price growth.

A 28.1% m/m surge in electricity rates was the main driver of the utility hike, while food prices grew 1.1% m/m. Transportation price growth slowed to 0.7% m/m (2.0% m/m in February), healthcare price growth eased to 0.4% m/m (0.8% m/m) and education prices chilled to 0.2% m/m (0.4%).

Alexander Paraschiy: March inflation was much stronger than we expected. We projected CPI increasing 1.1% on the back of higher electricity rates, but growth was almost twice as intense. As a rule, rising clothing and footwear prices reflect currency depreciation tendencies; but the hryvnia has already been stable for two months since January and we did not expect the depreciation effect to show up with a two-month lag. The March inflation figures lead us to revise our CPI forecast to 9.0% YTD (12.4% yoy) for 2017 from 8.2% YTD (12.0% yoy) estimated previously.