Page 28 - UKRRptJul19

4.2 Inflation 4.2.1 CPI dynamics
Ukraine’s consumer inflation increased 0.7% m/m in May after rising 1.0% m/m in April, driven mostly by prices for food and transportation, the State Statistics Service reported on June 10.
Annual inflation accelerated to 9.6% y/y from 8.8% y/y in April. Food prices grew 1.0% m/m in May (vs. 1.4% m/m growth in April), driven by fruits (11.9% m/m), meat (1.7% m/m) and bread (1.4% m/m). At the same time, egg prices declined 15.3% m/m, and milk prices dropped 1.8% m/m. Prices for transportation increased 1.5% m/m (vs. 1.0% m/m growth in April), driven mostly by prices for gasoline and lubricants (4.0% m/m growth). In addition, prices for alcohol and tobacco grew 1.3% m/m.
Consumer inflation in May was restrained by prices for clothing and footwear which declined 1.5% m/m (vs. 1.9% m/m growth in April). In addition, prices for housing and communal services declined 0.7% m/m (vs. 1.0% m/m growth in April) due to a 4.2% m/m price drop for natural gas. Core inflation (the consumer basket excluding goods and services with the most volatile prices) slowed to 0.2% m/m growth in May from 0.4% m/m in April. Annual core inflation stayed unchanged at 7.4% y/y.
Inflation pressures in Ukraine have not subsided despite the central banks decision to keep interest rates high making more cuts in the near term unlikely.
Core inflation (the consumer basket excluding goods and services with the most volatile prices) slowed to 0.2% m/m growth in May from 0.4% m/m in April. Annual core inflation stayed unchanged at 7.4% y/y.
The National Bank of Ukraine (NBU) kept rates on hold in June at 17.5% as it has prioritised fighting inflation over boosting growth.
28 UKRAINE Country Report July 2019 www.intellinews.com