Ukraine CPI speeds up to 2.2% m/m in March

Ukraine’s consumer prices sped up to 2.2% m/m (+3.4% yoy) in March, according to state statistics released on April 7. Transportation prices increased the most (+5.7% m/m) on the back of fuel price growth (+11.2% m/m). Food prices showed the fastest monthly increase (+2.4% m/m) since 2010. Healthcare prices grew 2.3% m/m on pharmaceutical price growth (+3.2% m/m). Utilities inched up 0.2% and education costs were unchanged.

Alexander Paraschiy: Hryvnia devaluation was the main reason behind March inflation accelerating. Higher prices for fuel, mostly imported, started accelerating in February, which have been reflected in domestically produced commodities.

Food prices also were driven by increased transportation costs. However, the picture of foods is quite mixed. On the one hand, we see a substantial acceleration of prices in dairy products (+3.6% m/m), fruits (+11.8% m/m), sugar (+10.4% m/m) and vegetables (+2.7% m/m). On the other hand, the prices for meat – among the fastest-growing – just inched up +0.1% m/m.

Apparently, the upward tendency will continue. Over the upcoming months, we will see increased natural gas prices (50% higher starting in May) and state heating rates (40% higher starting in July). We anticipate inflation accelerating to an annual rate of 7.1% yoy (12.7% ytd) this year.