Ukraine CPI grows 1.9% m/m in November

Ukraine’s consumer prices increased 1.9% m/m (21.8% yoy) in November compared to 2.4% m/m (19.8% yoy) in the prior month, according to state statistics released on Dec. 5. Slowing food price growth (1.3% m/m vs. 2.6% m/m in October) defined the CPI deceleration. At the same time, acceleration occurred  in utilities (4.4% m/m from 2.2% m/m in October), healthcare (2.4% m/m from 2.0% m/m in October) and transportation (2.0% m/m vs. 0.7% m/m in October).

Alexander Paraschiy: The trend is in line with our estimates, in which we expected the November devaluation wave to generate close to 2% m/m CPI growth in November-December. So we are keeping our initial forecast unchanged at 11.3% yoy (22.3% YTD) for 2014.

As for 2015, we assume no further hryvnia weakening given the expected spending cuts from the new Cabinet. In this respect, we anticipate inflation will slow to 15.2% yoy (5.7% YTD).