February
In February, overall CPI slowed to 1.2% from 2.5% MoM in January, but year-on-year CPI inflation rose to 18.4% due to the low February 2022 base (-0.3% MoM), when VAT rates on energy and food were reduced. Goods prices jumped up by 20.2% YoY in January, while prices of services rose 13.3% YoY. On a year-on-year basis, the largest increases in consumer prices were due to more expensive food and housing-related costs, which contributed 5.97 percentage points and 5.19ppt to the CPI, respectively.
The government's actions to freeze regulated prices (especially electricity and gas) translated into a stabilisation of electricity prices in February (0.0% MoM) and a slight decline in gas prices (-0.4%MoM) on the back of declines in unregulated liquefied petroleum gas (LPG) prices. At the same time, fuel prices declined. However, the price of solid heating fuels, water supply and central heating increased. February brought an increase in fuel prices (1.2% MoM), mainly due to more expensive gasoline and LPG, with declines in diesel prices.
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The month-on-month increase in food prices in February was similar to January's (1.8% vs. 2.0%) and exceeded our expectations. However, the hikes in food prices earlier this year are no longer as significant as in the worst months of 2022. Vegetables became more expensive, boosting the monthly CPI by 0.22ppt. Meat prices rose on a similar scale to January, while dairy prices were slower.
The significant increase in telecommunications prices is noteworthy, with communications prices up by 2.9% MoM, adding 0.12ppt to the monthly CPI increase.
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