Ukraine consumer inflation accelerates to 11% in September

Annual inflation in Ukraine accelerated to 11.0% yoy
in September from 10.2% in the previous month, driven mostly by food and clothing
prices, State Statistics Service reported on Oct. 8. Ukraine’s consumer prices
increased 1.2% m/m in September after declining 0.2% m/m in August.

Food prices increased 1.1% m/m in September after
declining 0.7% m/m in August. In particular, prices for eggs jumped 13.6% m/m,
prices for vegetables increased 3.0% m/m, milk prices increased 1.9% m/m. At
the same time, prices for fruits dropped 3.4% m/m, prices of sunflower oil
declined 0.9% m/m, sugar prices slid 0.1% m/m. Prices for alcohol and tobacco
increased 0.8% m/m.

Prices for clothing and footwear jumped 7.9% m/m after
sliding 3.0% m/m in August. In addition, prices for housing and utility
services increased 0.5% m/m (vs. 0.6% m/m growth as in August), driven mostly
by a jump in prices for natural gas and housing maintenance.

At the same time, prices for transportation slid 0.1%
m/m in September (after increasing 0.6% m/m in August) due to dropped fares for
railroad passenger transportation as well as lowered prices for fuel and
lubricants. 

Evgeniya Akhtyrko: The
significant jump in prices for clothing and footwear resulted in higher than
expected inflation in September. This price increase was likely caused by the
seasonal change of the collection. In addition, the sellers might expect that
demand for clothing might finally be unleashed after quite a long period of
lowered consumption amid Covid-19 related restrictions.

Meanwhile, the seasonal jump in food prices was not a
surprise after the deflation of the two previous months. Notably, prices for
sugar and vegetable oil – the leading items of the annual price growth –
declined  in September, following the global trend.

We expect the consumer inflation to cool in the
upcoming months amid the high comparative base of the previous year and finish
the year around 10% YTD (vs. 5.0% YTD in 2020).