Ukraine consumer inflation speeds up to 2.5% yoy in August

Ukraine’s consumer inflation accelerated to 2.5 % yoy
in August from 2.4% yoy in prior month, the State
Statistics Service reported on Sept. 9. Consumer prices dropped 0.2% m/m in
August (vs. a 0.6% m/m decline in July), driven by price declines for food, and
clothing and footwear.

Food prices slid 1.5% m/m in August (after declining
1.4% m/m in July). In particular, prices declined for vegetables (-13.5% m/m),
fruits (-8.4% m/m), sugar (-0.9% m/m). At the same time, prices for eggs
climbed 3.4% m/m, and for meat inched up 1.0% m/m. Prices for clothing and
footwear continued to slide, losing 3.0% m/m in August (after falling 4.8% m/m
in July).

Prices for housing and utilities jumped 5.7% m/m (vs.
a 1.4% m/m increase in July) due to a leap in natural gas prices by 37.7% m/m.
Prices for transportation climbed another 1.2% m/m in August after the same
monthly growth in the prior month, being driven by increasing prices for fuel.

Evgeniya Akhtyrko: The
continuing decline of prices for food and clothing was strong enough to offset
a huge monthly increase of gas prices caused by global energy price growth.
Food prices continued to decline amid a seasonal increase in the supply of
fruits and vegetables.

Meanwhile, the further slide in prices of clothing and
footwear implies that Ukrainian consumers are not likely to intensify their
expenditures for non-staples as the overall economic decline is ongoing.

We expect consumer inflation will accelerate to 5.5%
YTD in 2020 (vs. 4.1% YTD in 2019).