Ukraine: Inflation climbs to nine-month high in October
November 9, 2020
Consumer prices rose 1.00% over the previous month in October, a shaper increase than September’s 0.49% climb. October’s result largely reflected a rebound in prices for food and stronger price pressures for housing.
Inflation edged up to a nine-month high of 2.6% in October from 2.3% in September, thus moving closer to the lower bound of the Central Bank’s target range of 5.0% plus or minus 1.0 percentage point. Annual average inflation dipped to 2.8% from the prior month’s 3.1%. Lastly, core inflation ticked up to 3.2% (September: 3.1%).
Commenting on the inflation outlook ahead, Andrew Matheny and Tadas Gedminas, analysts at Goldman Sachs, noted:
“Headline inflation in Ukraine has remained persistently weak, but we think that it is likely to rise back toward the NBU's target over the course of the remainder of this year and into 2021, as base effects from last year's Hryvnia strengthening fade. Looking further ahead, we expect inflation to overshoot the NBU's +5.0 +/- 1pp target from 2021Q2, partly owing to the 30% minimum wage hike which would come into effect at the beginning of the next year”.