CPI up 0.5% mom, PPI down 0.7% mom in May

The State Statistics Committee reported that consumer prices rose 0.5% mom (+14.7% yoy and +7.4% YTD) in May. The main contributors to inflation were tobacco (following an increase in the tobacco excise) and oil products (following the rise in the oil price). Prices for food products marginally grew 0.3% mom. Producer prices declined 0.7% mom (+1.9% yoy and +2.8% YTD) in May. Andrii Parkhomenko: We reiterate our yearend forecasts of CPI at 15% yoy and PPI at 18% yoy. In our view, major factors that will impact consumer inflation this year are as follows: this year’s harvest and its effect on food prices; whether or not the government will hike utility prices; and further increases in excise taxes or duties.