"In October 2018, consumer inflation accelerated to 9.5% y-o-y (8.9% y-o-y in September). In the monthly measurement, prices rose by 1.7%," reads the report.
As expected, the fundamental inflationary pressure remained significant, which derived from an increase in spending, including on labor, and persistent domestic demand. Also, the impact on domestic prices expectedly increased due to an increase in world prices for energy and grain. In October, core inflation slowed moderately, to 8.8% y-o-y, which also corresponded to the NBU’s forecast. The dynamics of this indicator was caused, first of all, by the rise in prices for services under the influence of a further increase in production costs, in particular on labor, as well as pressure from consumer demand.
Taking into account the published data, the National Bank considers the risks for the inflation forecast published in the Inflation Report for October 2018 to be balanced and expects that, against the background of increasing administratively regulated prices and tariffs, inflation will reach 10.1% y-o-y at the end of 2018. In the medium term, it is planned to gradually lower inflation to a target level of 5.0% y-o-y plus or minus 1.0 percentage point.
FM-TV
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