Ukraine inflation speeds up to 2.6% yoy in October

Ukraine’s consumer inflation sped up to 2.6 % yoy in
October from 2.3% yoy in the prior month, the State Statistics Service reported
on Nov. 9. Consumer prices grew 1.0% m/m in October (vs. a 0.5% m/m increase in
September).

Food prices advanced 1.1% m/m in October (after
declining 0.6% m/m in September). In particular, prices jumped for eggs (22.7%
m/m), bread (1.5% m/m) and milk (1.4%). At the same time, prices for fruits and
vegetables declined 6.2% m/m and 0.9% m/m, respectively.

Prices for housing and utilities advanced 4.4% m/m
(vs. a 3.7% m/m increase in September) due to a leap in natural gas prices by
18.4% m/m. Prices for clothing and footwear advanced 2.0% m/m (after jumping
7.9% m/m in September).

Evgeniya Akhtyrko: The
seasonal increase of prices for basic food items is typical for Ukraine. This
year, it was partially compensated by a price decline for fruits and vegetables
amid abundant supply of these products. The monthly hryvnia depreciation of
1.6% contributed to the clothing and footwear pricing.

We expect consumer inflation will accelerate in the
last quarter of the year, caused mostly by higher food and natural gas prices.
We expect consumer inflation to land at 4.0% YTD in 2020 (vs. 4.1% YTD in
2019).