Gas, Electricity and Rail Hikes Drive July Inflation.

Details of July’s consumer price inflation data show that July’s monthly increase of 0.9% was driven by hikes in tariffs for electricity and gas supply (+85%) and rail transport (+50%). That resulted in an overall 10.3% increase in prices for services, which offset a 1.8% fall in food prices. July’s increase brought ytd CPI to 3.8%. (Ukraine’s 1H06 CPI, at 2.9%, was the lowest in the CIS). Alexander Viktorov: The drop in food prices is typical for July and usually results in deflation for the month. We expect CPI to accelerate further later in the year, and estimate 2006 inflation at 10%.