Ukraine CPI rises in October on food prices

Ukrainian consumer prices increased 0.4% m/m in October but still declined 0.1% in yoy terms, according to state statistics released on November 6. All key CPI components rose m/m, led by food +0.6%, healthcare +0.4%, and transportation +0.2%. At the same time, food prices declined 1.8% in yoy terms as part of a yearlong deflationary trend.

Alexander Paraschiy: The rising food prices look confusing against the backdrop of this year’s record grain harvest, which would indicate an opposite trend. The increase was likely caused by the effect of September rains on Ukraine’s crops. Still, the October results were not enough to change our CPI prognosis that the crop surplus will subdue prices at least in 1H14. Meanwhile for 2013, we are keeping our forecast at -0.4% yoy.