Ukraine consumer inflation rises 1.4% m/m in November

Ukraine’s consumer prices increased 1.4% m/m in
November, driven mostly by food, housing and utilities prices, the State
Statistics Service reported on Dec. 10. Annual inflation accelerated to 10.0%
yoy from 9.5% yoy in October.

Prices for housing and utilities surged 6.1% m/m,
reflecting mostly the government-imposed hike of residential gas rates by 23.5%.

Food prices grew 1.3% m/m (vs. 1.4% m/m growth in
October), driven again by vegetables (9.1% m/m), bread (3.3% m/m) and milk
(4.5% m/m). At the same time, prices for fruit fell 4.5% m/m and sugar slid
1.7% m/m. In addition, egg prices slid 0.5% m/m.

Overall, CPI growth was restrained by declining prices
for clothing and footwear (0.6% m/m decline in November vs. 2.6% m/m growth in
October) and slowed price growth for transportation (0.5 % m/m growth in
November vs 3.1% m/m growth in October).

Core inflation (the consumer basket excluding goods and
services with the most volatile prices) slowed to 1.1% m/m in November from
1.3% m/m in October. Annual core inflation sped up to 8.9% yoy from 8.8% yoy in
October.

Evgeniya Akhtyrko: The
acceleration in consumer inflation was inevitable as November prices were
affected by the government’s hike in residential gas rates. Meanwhile, elevated
consumer demand is supporting food price growth.

We expect 2018 consumer inflation will be close to
Ukraine’s central bank latest forecast of 10.1% YTD.