Annual inflation in Ukraine accelerated to 11.0% year on year in September from 10.2% for the previous month, driven mostly by food and clothing prices, State Statistics Service reported on October 8. Ukraine’s consumer prices increased 1.2% month on month in September after declining 0.2% m/m in August.
Food prices increased 1.1% m/m in September after declining 0.7% m/m in August. In particular, prices for eggs jumped 13.6% m/m, prices for vegetables rose 3.0% m/m and milk prices climbed 1.9% m/m. At the same time, prices for fruits dropped 3.4% m/m, prices of sunflower oil declined 0.9% m/m and sugar prices slid 0.1% m/m. Prices for alcohol and tobacco increased 0.8% m/m.
Prices for clothing and footwear jumped by 7.9% m/m after sliding 3.0% m/m in August. In addition, prices for housing and utility services increased 0.5% m/m (vs. 0.6% m/m growth as in August), driven mostly by a jump in prices for natural gas and housing maintenance.
At the same time, prices for transportation slid 0.1% m/m in September (after increasing 0.6% m/m in August) due to decreased fares for rail passenger transportation as well as lower prices for fuel and lubricants.
The significant jump in prices for clothing and footwear resulted in higher than expected inflation in September. This price increase was likely caused by the seasonal change of the collection. In addition, the sellers might expect that demand for clothing might finally be unleashed after quite a long period of lowered consumption amid coronavirus (COVID-19) related restrictions.
The seasonal jump in food prices is not a surprise after the deflation of the two previous months. Notably, prices for sugar and vegetable oil – the leading items of the annual price growth – declined in September, following the global trend.
Analysts at Concorde Capital expect the consumer inflation to cool in the upcoming months amid the high comparative base of the previous year and finish the year around 10% YTD (vs. 5.0% YTD in 2020).