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4.2 Inflation
Ukraine’s consumer inflation sped up to 2.6% y/y in October from 2.3% y/y in the prior month, the State Statistics Service reported on November 9. Consumer prices grew 1.0% m/m in October (vs. a 0.5% m/m increase in September).
Food prices advanced 1.1% m/m in October (after declining 0.6% m/m in September). In particular, prices jumped for eggs (22.7% m/m), bread (1.5% m/m) and milk (1.4%). At the same time, prices for fruits and vegetables declined 6.2% m/m and 0.9% m/m, respectively.
Prices for housing and utilities advanced 4.4% m/m (vs. a 3.7% m/m increase in September) due to a leap in natural gas prices by 18.4% m/m. Prices for clothing and footwear advanced 2.0% m/m (after jumping 7.9% m/m in September).
The seasonal increase of prices for basic food items is typical for Ukraine. This year, it was partially compensated by a price decline for fruits and vegetables amid abundant supply of these products. The monthly hryvnia depreciation of 1.6% contributed to the clothing and footwear pricing.
We expect consumer inflation will accelerate in the last quarter of the year, caused mostly by higher food and natural gas prices. We expect consumer inflation to land at 4.0% YTD in 2020 (vs. 4.1% YTD in 2019).
26 UKRAINE Country Report December 2020 www.intellinews.com
