Ukraine CPI increases 0.9% m/m in January

Ukraine’s consumer prices increased 0.9% m/m (40.3% yoy) in January vs. 0.7% m/m (43.3% yoy) in December, according to a UkrStat release on Feb. 8.  A faster foods prices increase (+2.2% m/m vs. +1.7% m/m in December) brought up by stronger fruits (+9.6% m/m), vegetables (+9.1% m/m) and dairy products (+2.9% m/m) prices growth was the key reason behind the outcome. Also through the month there was an increase in education prices (+2.5% m/m vs. 0.2% m/m in December), healthcare prices (+1.2% m/m vs. +1.1% m/m) and utility tariffs (+0.7% m/m vs 0.0% m/m).  Remarkably, utility prices increased due to a 12.1% m/m growth in water supply and sewage rates.  At the same time, we observed transportation tariffs decline (-0.4% m/m) in January, due to falling oil prices.

Alexander Paraschiy: January inflation is close to our initial estimates for this month (about 1%). At the same time, we anticipate CPI to speed up over the upcoming months due to a new hryvnia depreciation wave, a near 25% electricity tariff increase in March and a some gas prices adjustment in April. Our revised projection of CPI for this year, disclosed in last week’s macro report is: CPI will increase 9.5% YTD (16.2% yoy) in 2016.