Ukraine consumer inflation speeds up to 5% in 2020
Ukraine’s consumer prices increased 0.9% m/m in December after jumping 1.3% m/m in November, mostly due to increases in prices for food, transportation, as well as alcohol and tobacco, the State Statistics Service reported on Jan. 11.
Annual inflation sped up to 5.0% yoy from 3.8% yoy in November (and 4.1% ytd in 2019).
Food prices advanced 1.7% m/m in December (after increasing 1.3% m/m in November). Prices grew the most for eggs (16.1% m/m), vegetables (8.3% m/m), and sugar (6.0%). Prices for alcohol and tobacco added 0.5% m/m in December.
Prices for transportation increased 0.7% m/m in December, mostly due to increased prices for gasoline and lubricants (+2.5% m/m)
At the same time, prices for clothing and footwear dropped 4.6% m/m (after falling 2.5% m/m in November). Prices for housing inched up 0.1% m/m (vs. a 8.0% m/m surge in November).
Evgeniya Akhtyrko: Consumer inflation is gaining momentum in Ukraine, with demand being driven by the fast growth of real income, specifically wages. At the same time, high month-to-month fluctuations in prices for certain food items are typical for Ukrainian consumer market. And this might intensify the inflation expectations of individuals, feeding this self-sustaining cycle.
Consumer inflation is likely to speed up further in January, as the hike of the minimum wage to UAH 6,000 per month will serve as an additional factor for maintaining already high consumer demand. In addition, the government plans to hike some utility tariffs amid growing prices for energy resources.