Ukraine CPI grows 2.3% m/m in September

Ukraine’s consumer prices grew 2.3% m/m (51.9% yoy) in September compared to a 0.8% m/m decline in the prior month. All CPI components sped up except transportation. In particular, food increased 1.2% m/m (vs. -1.7% m/m in August), utilities grew 2.4% m/m (+0.2% m/m in August), clothing and footwear jumped 18.3% m/m (-1.2% m/m in August) and healthcare prices inched up 0.5% m/m (+0.4% m/m in August).  Transportation prices declined 1.6% m/m (-0.3% m/m in August) owing to falling fuel prices. Utilities increased on the back of a 24.6% m/m increase in electricity rates.

Alexander Paraschiy: We projected inflation accelerating this fall but the reported CPI increase has exceeded our expectations, largely owing to stronger-than-expected rises in food prices, as well as a significant jump in clothing and footwear prices. Nonetheless, we do not see grounds to revise our CPI projection. Price volatility is high while we do not see other sources of CPI strengthening except for heating rates, which will be evident in October. Against this backdrop, we are keeping our initial CPI forecast of 49.1% yoy and 42.9% YTD for 2015.