Consumer prices flat yoy in August

Ukraine’s consumer prices declined 0.3% mom and stayed flat yoy in August, according to UkrStat yesterday. Food prices still remained on the downward trend last month (-0.6% mom and -3.3% yoy) thanks to favorable changes in prices for fruits and vegetables. Prices for non-food items remained little changed in yoy terms, with the exception of transportation and educational services, which added 5.1% yoy and 5.2%, respectively.

Vitaliy Vavryshchuk: August ended a three-month period of disinflation in Ukraine, which largely came on a bumper harvest of fruits and vegetables (jointly accounting for 8.6% of the consumer basket). Consumer prices are set to pick up through end-2012, given that the grain harvest is estimated to be about 20% yoy lower. On the demand side, inflationary pressures will remain limited  – household incomes are set to decelerate due to the slowing economy and lack of bank lending. We maintain our end-2021 CPI projection of 5.9% yoy.