Ukraine CPI increases to 1.1% m/m in January

Consumer price rises sped up in Ukraine to 1.1% m/m (12.6% yoy) in January vs. 0.9% m/m (12.4% yoy) in December, according to the State Statistics Service report on Feb. 8. Accelerations in transportation price rate rises (+2.7% m/m vs. +0.7% m/m in the prior month), food prices (+1.9% m/m vs. +1.6% m/m) and education prices (+1.1% m/m vs. +0.1% m/m) stand behind the stronger CPI increase. Healthcare prices grew 0.6% m/m (+0.2% m/m in December 2016) and utilities increased 0.3% m/m (flat in the prior month). Prices for clothing and footwear dropped 4.3% m/m after a 2.8% m/m decline in the prior month.

Alexander Paraschiy: The CPI increase for the month was somewhat stronger than we expected (we projected +0.8% m/m).  Still the inflation number does not look too high especially in light of the anticipated dramatic effect of minimum wages doubling since January. In essence, we cannot rule out hryvnia volatility playing the key role in this speed up. Very likely, the doubled minimum wages will show up in February inflation. However, the January numbers make us keep, so far, our initial inflation forecast unchanged at +7.8% YTD (+10.5% yoy) for 2017.