In September 2017, consumer price inflation stood at 16.4% yoy, on a monthly measurement of the consumer price index rose 2%. This is evidenced by data published by the State statistics service of Ukraine.
“Actual inflation has exceeded the forecast published in the inflation report for July 2017 This is primarily due to accelerated growth of prices for raw food commodities, rising production costs and some recovery in consumer demand. The above forecast was also core inflation, although in General the fundamental inflationary pressure remained moderate,” – said the press service of the National Bank of Ukraine.
As stated in the NBU core inflation in September in annual terms slowed down to 7.7% (monthly measurement was 1.9%). First of all, high rates of growing prices of services included in core inflation, particularly the cost of services of secondary and higher education grew amid the increasing cost of labor. Also accelerated growth of prices for food products with a high degree of processing, particularly meat and dairy products – due to the increase in prices of the various raw foods. Slowed down the rise in price of clothes, shoes, and other, mostly imported non-food items (electronics, household appliances and goods for personal care) due to the favorable situation on the currency market.
Rising prices for raw food commodities in September, continued to accelerate (up to 28.2% yoy) and contributed most to the deviation of headline inflation from the forecast. In particular, there has been a considerable growth of prices for eggs on the background of the intensification of their exports. Also, the accelerated growth of prices for all types of meat. High was the rate of growth of prices for milk and vegetables.
The growth of administratively regulated prices and tariffs slowed down (to 25.9% year-on-year) since September of last year there was an increase in electricity tariffs. At the same time, in September we raised the minimum prices on alcoholic beverages, resulting in an expected acceleration of growth of prices to 17.5% yoy. Also, the accelerated growth of prices of tobacco products (41.1 per cent yoy), bread, and transportation services.
Fuel prices accelerated to 12.4% y/y In September, the prices of gasoline and diesel fuel amid rising oil prices on world markets and increasing exchange rate of the Euro, because the excise tax on fuel is set in this currency.
The national Bank noted that the current dynamics of the consumer price index indicates a further increase in the risks of inflation deviation from the forecast. The new inflation forecast will be announced at the meeting of the NBU Board on October 26, 2017
In September, the national Bank has worsened progos of inflation by the end of the year: inflation will deviate from the center point of the target range of 8% +/- 2 percentage points
The Ministry of economic development and trade forecasts inflation for the year at 12.2%.
According to forecasts of the International monetary Fund, inflation in Ukraine at the end of the year may be less than 10%.
The world Bank in April, has worsened the inflation forecast from 8.5% to 10%.