Ukraine: Inflation continues to fall after September spike
December 7, 2010
Inflation is finally moderating, following on the food price spike caused by a severe summer drought that damaged crops in the region. In November, consumer prices rose 0.3% over the previous month, which came in below the 0.5% price rise tallied in October. The relatively subdued monthly reading was the result of moderate price increases for food and non-alcoholic beverages (+0.1% month-on-month), which were responsible for the price spike observed in September, when they added 4.4% mom. As a result of the weak monthly reading, annual inflation dropped from 10.1% in October to 9.2% in November. Meanwhile, the core inflation index, which excludes more volatile items such as food and fuel, increased 0.7%, pushing annual core inflation up a notch to 8.0% in November. The government officially projects inflation to close this year at 13.1% and to fall to around 10% in 2011. However, Prime Minister Mykola Azarov recently stated that the government expects inflation not to exceed 10% by the end of the year.