Ukraine CPI speeds up to 3.5% m/m in April

Ukraine CPI speeds up to 3.5% m/m in April



10 травня 2016 года
Конкорд Капитал

Ukraine’s consumer price growth accelerated in April to 3.5% m/m (9.8% yoy) from 1.0% m/m growth (20.9% yoy) in the prior month, according to state statistics released on May 6. The main factor was a 20.1% m/m jump in utility rates on the back of a 48.4% m/m surge in natural gas prices. April food prices rose 0.1% m/m after a 0.7% m/m drop in March. Transportation costs accelerated 2.4% m/m (compared to1.0% m/m in March) owing to rising fuel prices. Price growth for clothing and footwear slowed to +1.7% m/m (from 10.7% m/m in March), as well as for healthcare services (0.7% m/m growth in April vs. 1.0% m/m in March) and education (0.3% m/m in April vs. 0.9% m/m in March).

Alexander Paraschiy: April’s 48% surge in retail natural gas prices can only be attributed to exhaustion in late March of “social limits” given by the state to the households. Namely, for those who use natural gas for individual heating, the government granted a limited portion of 1,200 cm per heating season (October-April) at a special price of UAH 3.60/cm. The remaining gas was charged at UAH 7.19/cm. It seems like most of these households expended the social limit by late March and started paying the full price for gas for most of April.

Recall that Ukraine’s Cabinet resolved in late April to price all gas for households at UAH 6.88/cm as of May 1. We expect this will have a minor effect on CPI in May. Yet for our 2016 forecast, we are also factoring in a heating price hike of 75-90% as of July 1 that the state utility regulator approved in early May. In light of the new information on gas and heating rate adjustments, we are updating our CPI forecast to 10.5% YTD (+14.5% yoy) for 2016, compared to the 8.5% YTD (13.9% yoy) growth we estimated previously.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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