Inflation in April: tariff hikes gravely impact monthly data

Inflation in April: tariff hikes gravely impact monthly data



7 травня 2015 года
ICU

Headline CPI in April rose 14.0% from the previous month, per official statistics agency reports, mainly due to a five-fold increase of the regulated tariff on natural gas which had been flat over the prior past several months. The tariff on electricity rose 33.6% last month as well, while the food component of the CPI basket increased 4.4% from the prior month. Excluding tariffs, inflation, which tends to be moderate in food, jumped 15.6% MoM in March. Headline CPI accelerated to 60.9% YoY from 45.8% YoY a month ago. The surge in inflation does help the government meet its budget revenue target (in nominal terms), but the downside is two-fold. First, it creates political tensions as voters (from the public and private sectors) demand wage increase that, upon implementation, would fuel future inflation. Second, such high inflation would cause the UAH to appreciate in real terms in the second half of 2015 and in 2016 at a pace which could be fast and unsustainable.

Источник: ICU

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