Ukraine inflation up to 9.5% in October, but slows in month on month terms

Ukraine inflation up to 9.5% in October, but slows in month on month terms
Ukraine’s inflation rose to 9.5% in October y/y, but in month on month terms the pace of growth of prices slowed to 1.7% / bne IntelliNews
By bne IntelliNews November 11, 2018

Ukraine’s inflation rose to 9.5% in October y/y, up from 8.9% a month earlier, Ukrstat reported on November 11.

In monthly terms inflation was up by 1.7% in October over the month earlier, against the 1.9% increase in September over August.

Inflation is beginning to fall thanks to tough action by the National Bank of Ukraine (NBU), which has hiked interests rates twice this year.

The NBU kept its key policy rate on hold at 18% at the October meeting following its increase by 0.5 percentage points (pp) from September 7.  "The current and forecast monetary conditions are sufficiently tight to bring inflation to its medium-term target of 5% in 2020," the central bank' statement said.

In September, consumer price inflation reached 8.9% year-on-year, having exceeded both the upper limit of the target range (6.5% ± 2 pp set for the end of the third quarter of 2018) and the July projections of the regulator (8.3%).

The moderate drop in inflation compared with previous months was due to slower growth in food prices, driven by an increase in domestic and imported supply of food products, as well as lower global food prices. At the same time, the underlying inflationary pressure remains strong. This is reflected in the sustained high reading of core inflation (8.7% y/y in September), the NBU added.

The increase in the headline rate was a base effect caused by lower inflation last year, but more encouraging is the slow in the growth of prices on a month-on-month basis.

Data

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