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NBU February 2019 Inflation Update

11 March 2019

Press Release


February 2019 saw a slowdown in consumer price inflation, to 8.8% yoy from 9.2% in January. In monthly terms, prices grew by 0.5%. This is according to data published by the State Statistics Service of Ukraine.


In February, actual inflation was practically in line with the forecast trajectory published in the January 2019 Inflation Report. Core inflation decelerated faster than expected, as the hryvnia strengthened considerably. This offset the faster growth in food prices, which was mainly due to temporary factors.


      Core inflation decelerated to 7.8% yoy in February, from 8.3% in January.


The prices of nonfood products grew slower (2.8% yoy), primarily due to the strengthening of the hryvnia, which impacted the prices of imported goods or goods, the cost of which largely depends on imports. Specifically, prices for home appliances, furniture, pharmaceuticals, clothing, and footwear grew at a slower pace. Prices for computer equipment even declined compared to the previous year.


The rate of growth in the prices of services also slowed, to 14.1% yoy. In particular, prices grew slower for housing maintenance, housing rental, foodservice, outpatient medical services, and insurance services.


The annual growth in the prices of highly processed foods also slowed slightly, to 9.2% yoy. However, this slowdown was restrained by a rise in the prices of cheese and cultured milk products, including due to an increase in the global prices of these products, and the continued decline in cattle livestock and related production.


      Raw-food prices accelerated their growth in February (to 4.6% yoy), predominantly due to a rise in prices for greenhouse vegetables caused by unfavorable weather in Turkey, which is the main supplier of these vegetables during winter. Flour prices also continued to grow, fueled by higher global prices and limited supply of high-quality raw products. The prices of borsch vegetables kept growing rapidly in annual terms, but remained unchanged from the previous month. The fast annual growth in prices for these products reflected the sharp increase in their prices seen in past months driven by lower crop yields of some vegetables in both Ukraine and Europe. At the same time, fruit prices continued to go down owing to the last year’s good harvest of apples and lower prices for imported bananas and citrus fruit. Egg prices were down substantially as a result of large output growth in poultry farming.


      The pace of growth in administered prices remained unchanged (18.7% yoy). Slower growth in bread and tobacco products prices offset faster growth in heating and hot water rates and rail fares.


      Fuel prices continued to decline (by 5.9% yoy), thanks to a fall in global oil prices in earlier months and the strengthening of the hryvnia.


The current trend of consumer price inflation and its components reflects an easing in inflation pressures, which is in line with NBU projections published in its January 2019 Inflation Report.

Last modification   11.03.2019