Page 17 - UKRRptOct21

4.2 Inflation
Finance Minister expects to keep inflation within 10%. Serhiy Marchenko believes will be possible to keep inflation within 10%. According to the State Statistics Service, inflation in July 2021 increased to 10.2% in annual terms, while in June this figure was at the level of 9.5%.
The National Bank of Ukraine expects that by the end of the third quarter inflation will peak this year at 11.2%.n"By the end of the year, we expect a stable situation both in public finances and in the economy, without sharp shocks. I think that we will have 4% of GDP growth this year," Marchenko said.
The Ministry of Economy expects inflation to remain at around 10% by the end of 2021 and considers it safe for economic development, according to the August inflation review published on September 24. “Even taking into account the unexpectedly high level of growth in global energy prices, we have to consider the fact in the absence of new challenges for the economy, the inflation rate is likely to be close to 10%, which in fact does not bear any signs of inflation-destructive impact on the positive achievements of economic development,” the ministry said.
The peak inflation is lower than expected Speaking with Bloomberg, the Deputy Chairman of the NBU, Serhiy Nikolaychuk, said: "We see that the peak inflation is lower than expected, and expect inflation to reach about 10.5% at the peak (the forecast of the peak was at 11% in July). At the end of the year, inflation may be even lower than the projected 9.6%."
4.2.1 CPI dynamics
Annual inflation in Ukraine amounted to 10.2% y/y in August, staying unchanged from the previous month, the State Statistics Service reported on September 9. Ukraine’s consumer prices slid 0.2% m/m in August after inching up 0.1% m/m in July.
Food prices dropped 0.7% m/m in August after declining 0.1% m/m in July. The decline was due to lower prices for fruits and vegetables (-5.0% m/m and -18.3% m/m, respectively), sunflower oil (-1.0% m/m) and bread (-0.8% m/m). At the same time, prices for eggs jumped 18.0% m/m, sugar prices increased 3.6% m/m, and prices for meat grew 0.8%.
Prices for clothing and footwear dropped 3.0% m/m after sliding 5.2% m/m in July. At the same time, prices for transportation grew 0.8% m/m in August (after increasing 1.1% in July), driven by higher prices for fuel and lubricants as well as increased fares for railroad and automobile passenger transportation. In addition, prices for alcohol and tobacco increased 0.4% m/m.
Prices for housing and utility services increased up 0.6% m/m (the same growth as in July), driven mostly by a jump in prices for natural gas and housing maintenance.
17 UKRAINE Country Report October 2021 www.intellinews.com