Ukraine CPI declines 1% in July

Consumer prices in Ukraine fell 1.0% m/m (though up 55.3% yoy) in July 2015, thus declining month-over-month for the first time since August 2013. The 2.0% m/m decrease in foodstuff prices was the main reason for the decline in the consumer price index. Other CPI components increased: education by 0.7% m/m, healthcare by 0.6% m/m, while utility and transportation rates increased 0.2% m/m.

Alexander Paraschiy: We anticipated an inflation slowdown by mid-summer, though the strong negative CPI result came as a a surprise. The dramatic plunge in prices of vegetables, by -21.6% m/m, was the only reason for this. We do not consider this result a new trend – rather a strong seasonal factor. On this backdrop, our CPI forecast remains unchanged at 49.1% yoy (42.9% YTD) in 2015.