Ukraine CPI remains at multi-year low in February

Ukraine’s consumer price index stood at 0.2% mom in February, decelerating to 3.0% yoy (from 3.7% in January), hitting another multi-year low, according to Ukrstat. February’s data was below the Reuters consensus of 0.4% mom and 3.4% yoy growth. Prices for food (53% of the consumer basket) grew a mere 0.3% mom but declined 0.5% yoy thanks to a sharp drop in vegetables and sugar prices (-48% yoy and -27% yoy, respectively).

Svetlana Rekrut: We expect inflationary pressure to remain weak in 1H12 due to the positive effect of last year’s plentiful harvest, and see CPI as likely to accelerate in 2H12. We keep our end-2012 CPI projection at 9.1% yoy, but think that the balance of risks is to the downside as the government has made it clear it does not plan to revise utility tariffs for households any time this year.