7 October 2014
Ukraine’s consumer prices jumped 2.9% m/m (+17.5% yoy) in September compared to 0.8% m/m (+14.2% yoy) in the prior month, according to state statistics released on Oct. 6. Faster food price growth (+2.9% m/m vs. -0.1% m/m in August) was the main factor. Other CPI components accelerated as well, including transportation (+3.3% m/m), education (+2.2% m/m), healthcare (+2.0% m/m) and utilities (+1.6% m/m).
Alexander Paraschiy: Hryvnia devaluation through August-September was the main reason for accelerated inflation in September. Though the central banking authorities have used administrative levers to force the exchange rate to “stabilize” near UAH 12.95/USD, importers have reflected in their prices an exchange rate at above UAH 14/USD.
Unless a new currency shock happens, we do not see a strong pretext for price acceleration over the upcoming months. In October, utility rates will keep rising after the 40% jump in July; however, they will have limited impact on CPI. Since the results were in line with our previous estimates in September, we are keeping our CPI forecast almost unchanged at 11.3% yoy (19.1% YTD) in 2014.