Ukraine consumer prices jump 0.8% in March

Ukraine’s consumer prices jumped 0.8% m/m in March,
owing mostly to growing prices for food, transportation, clothing and
sportswear, the State Statistics Service reported on Apr. 9. Annual inflation
slowed to 2.3% yoy in March from 2.4% yoy in the prior month.

Food prices rose 0.4% m/m in March (after declining 0.4%
m/m in February), driven mostly by bread (1.1% m/m), fruits (3.9% m/m),
vegetables (1.7% m/m) and sugar (2.9% m/m). At the same time, egg prices
declined 12.3% m/m and milk dropped 0.6% m/m.

Prices for clothing and footwear jumped 12.8% m/m
(after declining 4.3% yoy in February). In addition, prices for transportation
rose 0.7% m/m, mostly due to higher pricing for railway passenger services. On
top of that, prices in healthcare jumped 1.4% m/m, mostly due to growing prices
for pharmaceuticals.

Prices for housing and utilities slid 2.8% (vs. a 2.0%
m/m decline in February) due to a plunge in natural gas prices by 11.6% m/m and
a drop in prices for hot water and central heating by 5.2% m/m.

Evgeniya Akhtyrko: It looks
like March’s CPI was not much affected by the quarantine measures which
resulted in higher demand for some consumer goods, falling supply in retail,
and a lockdown of most non-food stores.

A jump in the prices of clothing and footwear was
likely the result of March’s depreciation of the national currency by 6.9%,
which impacted the pricing of imported items. However, this rise is likely to
be shaved off in April-May as the ongoing quarantine is likely to quash
consumers’ interest in this portion of their shopping list.

The further trend of consumer inflation in 2020 is
difficult to predict at the moment. On the one hand, the quarantine measures
and expected decline in personal income will suppress consumer demand
significantly. On the other hand, the expected increase of the budget deficit
involves a significant money injection into the economy, especially the
consumer market.