Ukraine CPI grows 2.4% m/m in October

Ukraine’s October consumer prices grew 2.4% m/m (19.8% yoy) compared to 2.9% m/m (17.5% yoy) in the prior month, according to state statistics released on Nov. 6. The main factor was food price growth (+2.6% m/m vs. 2.9% m/m in September), followed by utilities (+2.2% m/m vs. +1.6% m/m in September) and healthcare (+2.0% m/m, flat in September vs. the previous month). At the same time, education price growth slowed to +0.4% m/m (from +2.2% m/m in September) while transportation prices even decreased 0.7% m/m (compared to 3.3% m/m growth in September).

Alexander Paraschiy: Strong food price growth in October came as a surprise. Against the backdrop of an impressive grain harvest and sliding prices for fuel, we expected food prices to slow down during the last three months of the year. Now it looks like the inflation slowdown (that we had anticipated) will not become reality this year. The current devaluation wave prompted by the National Bank deciding to relax its control of the hryvnia exchange rate promises CPI growth of close to 2% m/m in each of the next two months. We are revising our CPI forecast to 11.8% yoy (22.3% YTD) in 2014 from 11.3% yoy (19.1% YTD) estimated previously.