Ukrainian consumer prices flat yoy in September

Ukraine’s CPI stood at 0.1% mom in September, implying consumer prices remained flat yoy, UkrStat reported Friday. Importantly, prices for food products kept declining for the sixth consecutive month, -0.1% mom and -2.9% yoy in September, mainly due to price decreases in fruits, vegetable and sugar. Prices for most consumer basket components remained little changed last month, with only two notable exceptions: transportation services added 0.4% mom (+ 5.0% yoy) and education spiked 2.7% mom (+ 4.4% yoy).

Alexander Paraschiy: Inflationary pressure in Ukraine remained weak – with nominal household income decelerating and bank loans remaining unaffordable; demand-side drivers are muted. As before, we expect prices to accelerate in 4Q12 on a weaker grain harvest that might have a pronounced effect on the prices of many food staples. We maintain our end-2012 CPI projection of 5.9%, but given the recent data, we think this forecast may be a bit pessimistic.