Ukraine: Inflation rises to 18-month high
July 7, 2011
In June, consumer prices added 0.4% over the previous month, which was half the 0.8% price increase tallied in May. The slower monthly rate was mainly the result of weaker price increases for food and non-alcoholic beverages (+0.3% month-on-month) as well as in transportation (+1.5% mom), in particular reflecting lower prices for fuels and lubricants. However, as the reading contrasted the unusual 0.4% price drop in the same month last year, annual inflation rose from 11.0% in May to 11.9% in June, which represents the highest level in 18 months. Core inflation, which excludes volatile items such as food and energy, followed suit and increased form 7.8% in May to 8.3% in June. Annual inflation is likely to accelerate again next month, boosted by the same unfavourable base effect, before beginning a downward trend towards the end of the third quarter. In fact, the government anticipates inflation to moderate to 8.9% by the end of year and to drop further to 7.9 next year.