Ukraine CPI speeds up to 0.6% m/m in February

Ukraine’s consumer prices sped up to 0.6% m/m (+1.2% yoy) in February, according to state statistics released on March 6. Food and transportation prices have been growing the fastest at 1.3% m/m and 2.1% m/m, respectively. Other key items also increased but less dramatically: health care +0.9% m/m, education +0.5% m/m, and utilities +0.2% m/m.

Alexander Paraschiy: The hryvnia devaluation and subsequent jump in fuel prices are the main reasons for inflation accelerating. We expect a further price adjustment in the upcoming months since not all producers, nor even importers, have promptly reflected the new hryvnia exchange rate in their prices. Also we should anticipate utilities to get more expensive in the upcoming months, in line with IMF commitments. These trends lead us to believe that CPI will speed up to at least 5.7% yoy (8.8% ytd) in 2014.