Ukraine consumer prices stay flat m/m in May

11 June 2018

Ukraine’s consumer prices remained flat m/m in May, slowing annual inflation to 11.7% yoy (from 13.2% yoy in April), the State Statistics Service reported on June 8. Prices for food and soft beverages dropped 0.7% m/m (after 1.1% m/m growth in April), mostly due to a seasonal decline in prices for eggs (-9.5% m/m), milk (-2.5% m/m), vegetables (-2.9% m/m) and fruits (-1.1% m/m). Additionally, the seasonal change in apparel pushed down prices for clothing and footwear, resulting in a monthly decline of 0.4% m/m (after 2.1% m/m growth in April).


Meanwhile, prices for alcohol and tobacco jumped 1.8% m/m in May (after 1.5% m/m growth in April) as a consequence of excise duty growth by 20-30% in the beginning of 2018. Prices for household durables and transportation increased 0.6% m/m alike, while utility prices inched up 0.1% m/m.


Core inflation (the consumer basket excluding goods and services with the most volatile prices) slowed to 0.2% m/m growth from 0.6% m/m growth in April, while annual core inflation slowed to 9.3% yoy growth from 9.4% yoy in the previous month.


Evgeniya Akhtyrko: The significant deceleration of inflation in May amid increased supply of agricultural produce was widely expected given very favorable weather conditions in late April and May. The slowdown in core inflation also helped to improve the result.


The disinflation process is very likely to continue through the summer due to increased food supply amid an expected good harvest. According to our projections, CPI will increase 8.9% YTD, or 11.8% yoy in 2018.