Ukraine consumer inflation stays at 10% in January

Annual inflation in Ukraine was 10.0% yoy in January,
unchanged from the previous month, State Statistics Service reported on Feb. 9.
Ukraine’s consumer prices jumped 1.3% m/m in January after growing 0.6% m/m in
December, due to increases in prices for food, transportation and utility
services.

Food prices jumped 2.5% m/m in January (after increasing
1.2% m/m in December). Prices grew the most for vegetables (20.5% m/m), eggs
(3.9% m/m) and fruits (2.5%). At the same time, prices for sugar declined 0.8%
m/m and prices of sunflower oil slid 0.5% m/m. Prices for alcohol and tobacco
added 0.2% m/m in January (the same as in December).

Prices for clothing and footwear dropped 5.7% m/m
(after falling 3.6% m/m in December). Meanwhile, prices for housing and
utilities added 0.7% m/m (after sliding 0.1% m/m in December) amid a 12.0% m/m
jump in the price of water supply. In addition, prices for transportation
increased 1.3% (after declining 0.2% m/m in December), due to higher prices for
fuel and lubricants (2.6% m/m) and increased passenger fares (0.9% m/m).

Evgeniya Akhtyrko: The
increase of month-to-month prices in January was expected. As we
noted, the decline of prices for utility services and transportation in
December was temporary. In addition, the inflation of food prices picked up significantly.
Likely, a 2.7% m/m hryvnia depreciation in January resulted in accelerated
growth of prices for vegetables and fruits.

At the same time, hryvnia depreciation was not an
obstacle for the ongoing downward trend of prices for clothing and footwear.
Possibly, amid the high inflation of food and housing prices, Ukrainian
consumers have less income to allocate for non-essentials, and the sellers of
clothing and footwear have to agree on lower mark-ups.

We expect consumer inflation to reach 7.5% YTD in 2022
(vs. 10.0% YTD in 2021).