Ukraine CPI grows 1.0% m/m in February

Ukraine’s consumer price index (CPI) rose 1.0% m/m (14.2% yoy) owing 1.5% growth in food prices, the State Statistics Service reported on March 9. CPI grew 1.1% m/m (12.6% yoy) in January, including 1.9% m/m growth in food prices.  

Transportation pricegrowth slowed to 2.0% m/m (from 2.7% m/m growth in January), education prices slowed to 0.4% m/m growth (1.1% m/m in January), and utilities eased to 0.2% m/m growth.  Healthcare prices slightly sped up to 0.8% m/m growth from 0.6% m/m in the prior month.  Prices for clothing and footwear kept falling at -2.8% m/m in February from a -4.3% m/m plunge in January.

Alexander Paraschiy: Consumer inflation slightly exceeded our projections of 0.7% m/m growth in February. However, this tendency does not look strong enough even to give an extra 1pp to the initial CPI estimate. What’s more, a substantial party of inflationary factors anticipated for the year — hryvnia weakening and doubled minimum wages — has been fulfilled already in the first two months.

In March, we expect the CPI will increase 1.1% m/m on the back of a 28% surge in electricity rates for households. Afterwards, we expect inflation slowing gradually with a stabilized national currency. Our 2017 projection remains 7.8% ytd (10.5% yoy) growth.