Consumer prices in Ukraine rose 0.5% month-on-month in February following a 1% m/m growth in January, according to the nation's state statistics service Ukrstat.
The price growth was mostly driven by food, housing and utility prices. Annual inflation stood at 8.8% year-on-year in February vs 9.2% y/y in January.
Food prices grew 0.9% m/m in February (vs. 2.1% m/m growth in January), driven by vegetables (6.6% m/m), fruits (3.6% m/m) and bread (1.2% m/m). At the same time, prices for eggs declined 3.6% m/m, and prices for meat slid 0.9% m/m.
Prices for housing and utilities rose 0.5% m/m, driven mostly by price hikes for water (1.8% m/m) and housing maintenance (1.2% m/m).
As in January, declining prices for clothing and footwear and transportation served as restraining factors for inflation. In particular, prices for clothing and footwear declined 3.5% m/m (vs. a 4.6% m/m drop in January), while transportation prices slid 0.1% m/m (vs. a 1.7 % m/m fall in January).
Core inflation (the consumer basket excluding goods and services with the most volatile prices) slowed to 0.2% m/m growth in February from 0.3% m/m in January. Annual core inflation stood at 7.8% y/y in February vs 8.3% y/y in January.
Evgeniya Akhtyrko at Kyiv-based brokerage Concorde Capital wrote in a note on March 11 that February’s trends in consumer inflation were similar to those in January. Food price growth has been easing amid increased supply of some goods.
"The hryvnia appreciation by 2.6% in February fostered declining prices for items with a high share of imports, namely clothing, footwear and gasoline. February’s inflation slowdown gives solid grounds to Ukraine’s central bank to lower its key policy rate from 18.0% currently at its monetary policy committee meeting on March 14," she added.
Concorde expects Ukraine’s consumer inflation to slow to 6.7% YTD in 2019 (from 9.8% YTD in 2018).