Ukraine CPI concludes 2015 at 43% surge

Ukraine’s consumer prices concluded 2015 surging 43.3% YTD (48.7% yoy), the State Statistics Service of Ukraine reported on Jan 6. The main sources of inflation were the hryvnia’s devaluation at the year start, food price growth of 41.5% YTD (45.9% yoy), as well as doubled utility rates (2.2x yoy). Prices also grew significantly for clothing and footwear (35.0% ytd), healthcare (29.1% YTD), education (24.2% YTD) and transportation (20.4% YTD).

Alexander Paraschiy: The 2015 results were close to our estimates of 44.2% YTD and 48.6% yoy for the year. Inflation patterns will change somewhat in 2016, with only modest depreciation expected, as the main factor to be the relative stability of the national currency. At the same time, the CPI will face upward pressure from higher retail electricity rates (which will grow 25% in March and then 25% in September), as well as another natural gas price adjustment in April. In light of this, we project CPI increasing 8.6% YTD (13.7% yoy) in 2016.