Ukraine consumer inflation slows to 10.3% in November

Annual inflation in Ukraine slowed to 10.3% yoy in
November from 10.9% yoy in the previous month, driven mostly by a decline of
prices for clothing and footwear, State Statistics Service reported on Dec. 9.
Ukraine’s consumer prices increased 0.8% m/m in November after growing 0.9% m/m
in October.

Food prices increased 1.1% m/m in November (the same
increase as in October and September). In particular, prices for vegetables
jumped 7.8% m/m, bread prices increased 2.2% m/m, prices for milk and butter
increased 2.9% m/m. At the same time, prices for fruits dropped 7.6% m/m,
prices of sunflower oil declined 0.5% m/m. Prices for alcohol and tobacco
increased 0.6% m/m (the same increase as in October).

Prices for clothing and footwear declined 2.1% m/m
(after jumping 1.2% m/m in October). In addition, prices for transportation picked
up 1.2% (after increasing 1.1% m/m in October) driven by higher prices for
gasoline and lubricants and increased fares for passenger automobile and
railroad transportation.

Prices for housing and utility services stayed flat in
November (after declining 0.9% m/m in October). In particular, prices for
natural gas slid 0.3% m/m, and prices for housing maintenance increased 1.0%
m/m.

Evgeniya Akhtyrko: The annual
inflation is slowing, but consumer demand remains high. In particular, the
monthly increase of food prices has stayed at the same level for three months
in a row. Prices for transportation have picked up as well. The major factor of
lower inflation in November was the decline of prices for clothing and
footwear, which was likely the result of significant appreciation of Ukrainian
currency in the first half of November. Unwavering prices for housing and
utility services also helped to reach a decent inflation indicator.

We expect consumer inflation to land around 10% YTD
in 2021 (vs. 5.0% YTD in 2020).