Ukraine consumer inflation slows to 0.8% m/m growth in April

Ukraine’s consumer price growth slowed to 0.8% m/m in
April (from 1.1% m/m in March), the State Statistics Service reported on May
10. Clothing and footwear prices slowed to 2.1% m/m growth from 9.6% m/m in
March, while food price growth remained at 1.1% m/m for the third months in a
row. Transportation prices increased 0.3% m/m (from a decline of 0.7% m/m in
March) while utility prices grew 0.2% m/m (from 0.3% m/m growth in March).

Annual inflation slid to 13.1% yoy growth in April
from 13.2% yoy in March.

Core inflation (the consumer basket excluding goods
and services with the most volatile prices) slowed to 0.6% m/m growth from 1.4%
m/m growth in March, while annual core inflation of 9.4% yoy remained
unchanged.

Evgeniya Akhtyrko: The cooling
inflation means that CPI in and of itself is not likely to be the reason for
Ukraine’s central bank to tighten its monetary policy by hiking its key policy
rate from the current 17.0%. Therefore, only a very negative development in
Ukraine-IMF talks regarding the next loan tranche might prompt it to resort to
another key policy rate hike at its upcoming meeting on May 24.

We expect to see inflation will continue to slow in
2H18. According to our projections, CPI will increase 8.9% YTD, or 11.8% yoy in
2018.