Inflation decelerates to 7.2% y-o-y in February

Consumer inflation decelerated to 7.2% y-o-y in February, from 8.2% y-o-y in January. Mykyta Mykhaylychenko: The slow down happened on the back of moderate growth in food prices (to 5.2% y-o-y, from 8.6% y-o-y in January). At the same time, utilities prices accelerated their growth to 20% y-o-y (15% y-o-y in January). As utility prices are expected to increase further in the months to come, pursuant to Ukraine’s IMF agreement, we expect the inflation trend to reverse, with annual inflation for 2011 landing at 9%-10%.