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Monthly Analytical Note "Inflation Analysis" (November 2011)


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In November 2011, the CPI grew by 0.1% (it declined by 0.1%, excluding the seasonal factor). On a year-on-year basis, CPI growth slowed down to 5.2%. Since the start of the year, the CPI has increased by 4.4%.


The supply-side factors continued to play a key role in the development of inflationary processes. Thus, the non-core CPI declined by 0.2% over a month (contribution to the change in the CPI stood at 0.1 p.p.).


The excess domestic supply of raw foods owing to a bumper crop and favourable weather conditions for their preservation caused a decline in prices for raw foods. Prices for fruit and vegetables continued to decrease by 1.3% and 2.5% respectively. On a year-on-year basis, prices for vegetables fell by 42.6%.


Administratively regulated prices for commodities and services declined by 0.7% (contribution to the change in the CPI stood at "minus" 0.1 p.p.) owing to a drop in liquefied gas prices (-9.5% over a month) and sugar prices (-7.1%). The prices for other components (utility prices) demonstrated a weak growth. The fuel prices remained unchanged (a 0.1% decrease in November) on account of stable oil prices on world markets. Overall, it entailed a 0.2% decline in the non-core CPI (contribution to the CPI made up 0.1 p.p.). The non-core CPI growth year-on-year slowed down to 2.7%.


In November, core CPI growth slowed down to 0.3% (contribution to the CPI made up 0.2 p.p.) versus 0.6% in October owing to the fact that prices for deeply processed foodstuffs continued to increase at a slower pace (a month-on-month change stood at 0.4%, contribution to the core CPI made up 0.1 p. p.). Against the backdrop of higher inflation registered in Ukraine's trading partners, the strengthening of the nominal exchange rate (12.3% since April 2011) has curbed the narrow core CPI growth (on a month-on-month basis – by 0.3%, on a year-on-year basis – by 2.8%).


The producer price index (hereinafter - the PPI) increased by 0.6% in November, which was attributed to a rise in the prices for production and distribution of electric power, gas, and water (month-on-month change stood at 7%, contribution to the PPI made up 1.5 p. p.). A slowing in global economic activity continues to exert downward pressure on prices for products of basic export-oriented industries. The annual growth rate of PPI stood at 17.3%.


The complete wording of the analytical note has been posted on the official website at (in Ukrainian): http://www.bank.gov.ua/control/publish/category?cat_id=58162.


Last modification   22.12.2011