Ukraine consumer inflation slows to 10.9% in October

Annual inflation in Ukraine slowed to 10.9% yoy in October
from 11.0% in the previous month, driven mostly by a government imposed decline
of electricity tariffs, State Statistics Service reported on Nov. 9. Ukraine’s
consumer prices increased 0.9% m/m in October after growing 1.2% m/m in
September.

Food prices increased 1.1% m/m in October (the same
increase as in September). In particular, prices for vegetables jumped 10.6%
m/m, bread prices increased 2.4% m/m, prices for milk and butter increased 1.9%
m/m. At the same time, prices for fruits dropped 6.6% m/m, prices of sunflower
oil declined 1.6% m/m, sugar prices slid 3.1% m/m. Prices for alcohol and
tobacco increased 0.6% m/m.

Prices for clothing and footwear increased 1.2% m/m
(after jumping 7.9% m/m in September). In addition, prices for transportation
picked up 1.1% (after sliding 0.1% m/m in September) driven by higher prices
for gasoline and lubricants and increased fares for passenger automobile
transportation.

At the same time, prices for housing and utility
services declined 0.9% m/m (vs. 0.6% m/m growth as in September), as
electricity prices declined 7.4% m/m. Meanwhile prices for natural gas
increased 3.2% m/m, and prices for housing maintenance increased 1.6% m/m.

Evgeniya Akhtyrko: Consumer
inflation moderated in October. However, the slowdown was mostly the result of
the government’s populistic decision to decrease the electricity tariff at the
beginning of the heating season. Without this move, consumer inflation wouldn’t
have gone down amid the steady growth rate of food prices as well as renewed
inflation in transportation.

We expect the consumer inflation to cool in the
upcoming months amid the high comparative base of the previous year and finish
the year at around 10% YTD (vs. 5.0% YTD in 2020).