Ukraine CPI declines 0.8% m/m in August

Ukraine’s consumer prices declined 0.8% m/m (up 52.8% yoy) in August compared to a 1.0% m/m slide in the prior month, the State Statistics Committee of Ukraine reported on Sept. 7. The key factors were food (-1.7% m/m) and transportation (-0.3% m/m) as other components increased, such as healthcare (+0.4% m/m), utilities (+0.2% m/m), and education (+0.1% m/m).

Alexander Paraschiy: An unusually sharp seasonal decline in prices for fruits (-17.2% m/m) and vegetables (-16.2% m/m) was the main source for deflation.  Declining fuel prices (-1.1% m/m) also contributed to the outcome on the back of sliding oil prices. At the same time, all other core CPI components continued growing, including meat (+2.9% m/m) and dairy (+1.0% m/m). Such statistics hint at deflation coming to an end in the upcoming months. Oil prices have strengthened and the seasonal effect will not last long. So we are sticking to our initial 2015 CPI forecast (+49.1% yoy and +42.9% YTD) in anticipation of CPI strengthening on the back of higher heating bills in October.