11 March 2019
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.
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
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.