Ukraine consumer prices slide 0.3% m/m in August

10 September 2019

Ukraine’s consumer inflation slid 0.3% m/m in August owing to dropping prices for food, clothing and footwear, utilities and maintenance, and transportation, the State Statistics Service reported on Sept. 9. Consumer prices declined 0.6% m/m in July.


Annual inflation slowed to 8.8% yoy in August from 9.1% yoy in July.


Food prices slid 0.3% m/m in August (vs. a 0.7% m/m decline in July), driven by vegetables (-9.0% m/m), fruits (-8.4% m/m) and sugar (-2.0% m/m). At the same time, prices for eggs jumped 39.2% m/m, meat inched up 1.0% m/m, and bread grew 0.6% m/m.


Prices for clothing and footwear continued to decline, losing 2.8% m/m (after a 4.5% m/m decline in July). In addition, prices for utilities and house maintenance dropped 0.9% m/m (vs. 2.8% m/m decline in July) driven by lower natural gas prices for households (-4.5% m/m). On top of that, prices for transportation slid 0.6% (vs. a 1.1% m/m decline in July) due to declining prices for gasoline.


The price decline was offset by 0.8% m/m growth of prices for alcohol and tobacco. In addition, prices for restaurants and hotels also increased 0.6% m/m.


Core inflation (the consumer basket excluding goods and services with the most volatile prices) declined 0.1% m/m in August, the same as in July. Annual core inflation slowed to 7.2% yoy from 7.4% yoy in July.


Evgeniya Akhtyrko: The seasonal deflation in August was in line with our forecast, mostly driven by the same factors as in July. However, the factor of food price decline diminished. A 2.0% appreciation of the national currency fostered declining prices for clothing and footwear, as well as gasoline, making imported goods less expensive.


We expect to see positive m/m inflation in September, driven mostly by seasonal price growth for food. In addition, traditional growth of service prices in September will also contribute to inflation. We forecast that consumer prices will increase 6.7% YTD in 2019 (vs. 9.8% YTD in 2018).

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