Ukraine’s consumer prices rose 0.7% m/m in October owing to growing prices for food, clothing and footwear, and alcohol and tobacco, the State Statistics Service reported on November 8. Annual inflation slowed to 6.5% y/y in October from 7.5% y/y in September.
Food prices jumped 0.9% m/m in October (vs. 0.3% m/m growth in September), driven mostly by eggs (9.6% m/m), vegetables (4.6% m/m), and milk (2.6% m/m). At the same time, prices for sugar declined 2.3% m/m and fruits fell 0.6% m/m.
Prices for clothing and footwear rose 1.9% m/m (after an 8.7% m/m surge in September). In addition, prices for alcohol and tobacco jumped 0.8% m/m.
At the same time, prices for utilities and home maintenance dropped 0.4% m/m (after a 0.2% m/m decline in September), driven by lower natural gas prices for households (-4.3% m/m). In addition, transportation prices slid 0.7% (vs. a 0.4% m/m decline in August) due to falling prices for gasoline and railroad transit.
Core inflation (the consumer basket excluding goods and services with the most volatile prices) also rose 0.7% m/m in October (vs. a 1.2% m/m increase in September). Annual core inflation slowed to 5.8% y/y from 6.5% y/y in September.
“The drivers of consumer inflation in October were essentially the same as in September. The factor of food prices was reinforced amid a seasonal decline in supply of vegetables and eggs. The continuing decline in natural gas rates for households served as a major restraining factor helping to reach a substantial slowdown in year-on-year inflation,” Evgeniya Akhtyrko of Concorde Capital said in a note. “Due to a faster-than-expected inflation slowdown in October, we revise downward our forecast of CPI for 2019, anticipating it at 6.0% YTD in 2019 (vs. 9.8% YTD in 2018).”