Ukraine: Inflation jumps to an over three-year high in March
April 7, 2014
In March, consumer prices increased 2.2% over the previous month, which was markedly up from the 0.6% rise registered in February and represented the largest monthly increase since September 2010. The increase was broad-based in March, with all the components of the index increasing over the previous month. The largest increases were registered in transport as well as in clothing and footwear.
Annual inflation jumped from February's 1.2% to 3.4% in March, which marked the highest rate since January 2012. Despite the acceleration in recent months along with developments in the political sphere and in the foreign exchange market, inflation remains below the Central Bank's 4.0%-6.0% target range for 2013-2014. Meanwhile, annual average variation in consumer prices swung from February's minus 0.1% to plus 0.3% in March.
Inflation is likely to continue rising in the coming months, mainly due to higher energy costs, as Russian state gas producer, Gazprom, increased the gas price for Ukraine since 1 April. Against this backdrop, FocusEconomics Consensus Forecast panelists expect inflation to end 2014 at 8.6%, which is up 2.3 percentage points from last month's forecast. For 2015, the panel sees inflation rising to 6.8%.