Ukraine CPI Edges up 0.2% MoM in July

August 14, 2017
 

News
Ukraine’s State Statistics Committee reported that its main consumer price index (CPI) rose by 0.2% MoM in July, bringing rolling 12-month inflation to 15.9%, up from 15.6% YoY in June and 13.5% in May. UkrStat also reported that producer prices increased by 1.8% MoM in July after a decline of 0.6% MoM in June. On a yearly basis, the PPI index has risen by 23.3% after the July data is included, falling from the 26.3% YoY registered after the June data.


Commentary
July was the 11th consecutive month when the CPI demonstrated a month-on-month increase. This was somewhat unusual in the Ukrainian economic cycle as historically, UkrStat has reported declining prices during the summer months. Still, the July increase is miniscule, and the variation from the long-term trend does not look very significant. This year’s CPI performance has been largely influenced by a meat price increase (20.4% YtD) in the food category and by the electricity price increase (28.1% YtD) in the utility category.       
The PPI growth in July was spurred almost solely by a 7% MoM jump in the utility sector prices due to a 7.7% MoM increase in electricity tariffs for industrial users. Meanwhile, the overall utility prices in the PPI basket have risen just 5.7% YtD.  
Taking into account all seasonal factors and expectations that Ukraine’s nationwide grain harvest will be about 8% YoY lower this year, we are raising our initial forecast of consumer inflation in Ukraine for full-year 2017 from 10% to 12.5% YoY. 


 


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