In November 2018, consumer price inflation accelerated to 10.0% yoy. Prices rose by 1.4% mom. This is according to data released by the State Statistics Service of Ukraine.
In November, inflation was close to the NBU’s forecast published in the October 2018 Inflation Report. A slight increase in the core inflation readings and the rate of growth in administered prices was almost completely offset by a slower pace of growth in the prices of raw foods.
- Core inflation sped up 8.9% yoy in November. The rise primarily reflected higher services prices, driven by further increases in production costs, wages in particular, and pressure from consumer demand.
Prices for processed foods grew a steady 10.0% yoy. The acceleration in the prices for pasta, confectionaries and flour products was counterbalanced by slower growth in the prices of other food products. More specifically, the prices for meat and dairy products grew at a slower pace on the back of a drop in global prices. This same factor, together with expectations of a bumper sunflower harvest in Ukraine, contributed to a fall in the prices of sunflower oil, spreads and mayonnaise.
The growth in the prices for non-foods also decelerated slightly, to 4.4% yoy. In particular, thanks to the strengthening of the hryvnia seen in October and November, the prices for household appliances and cars increased at a slower pace, while the price increases in clothing and footwear remained modest.
- Although speeding up to 2.4% yoy in November, the growth in raw food prices was weaker than expected. The growth in vegetable prices accelerated, driven by the insufficient supply of vegetables due to unfavorable weather conditions, and the poor vegetable harvest in Europe. Higher wheat prices pushed up flour prices. Meanwhile, fruit and egg prices grew cheaper and milk prices rose at a slower pace in November, offsetting the faster growth in the prices for other raw foods.
- The growth in administered prices accelerated to 17.3% yoy. Indeed, November witnessed an increase in the prices of natural gas for households (by 22.9%), and residential landline telephone service tariffs. Apart from that, the prices for alcoholic beverages and tobacco goods, as well as passenger road transport fares, grew at a fast pace.
- A drop in global oil prices, coupled with the strengthening of the hryvnia, contributed to lower growth in fuel prices.
Despite minor deviations in the rate of price increases for various product groups in November, the year-end CPI inflation forecast (10.1% yoy) has remained valid