CPI up 22.3% yoy in 2008, PPI up 23.0% yoy

According to the State Statistics Committee, the consumer price index rose 22.3% over 2008, while producer prices added 23.0%. The hike in CPI is mostly due to the increase in food prices in the first half of 2008, whereas in 4Q08 the growth was driven by prices for utilities, namely natural gas and heating. Annualized growth in producer prices plunged from 46.9% in August to 23.0% in December due to deterioration in commodity prices. Andrii Parkhomenko: 2008’s CPI of 22.3% came in near our long-held forecast of 21.0%. We expect that this year, growth in both consumer and producer prices will slow to 15% and 18%, thanks to economic contraction, and that most of the growth will be attributable to rising utility prices.