Ukraine: Inflation surges in April
May 10, 2011
In April, consumer prices increased 1.3% over the previous month, which was virtually unchanged over the 1.4% price rise recorded in March but surprised the market on the upside, as analysts expected a more moderate 0.9% hike. Furthermore, as the reading came in well above the minus 0.3% price increase tallied in April last year, annual inflation jumped from 7.7% in March to 9.5% in April. As in previous months, the monthly price increase was mostly the result of higher prices for food and non-alcoholic beverages (+1.5% month-on-month) as well as for transport (+3.3% mom). In addition, the monthly hike reflected a 15% rise in electricity tariffs, while the expected 20% hike in residential gas and heating tariffs, which was negotiated with the IMF in March, was postponed by the government. Meanwhile, the core inflation index, which excludes volatile items such as food and fuel, increased a less pronounced 0.6% over the previous month, driving the year-on-year core inflation rate to 7.3% (March: 7.0% year-on-year). The government anticipates year-end inflation to rise to 8.9% this year before moderating next year to 7.9%.