OREANDA-NEWS. In October, the growth of producer prices (measured by PPI) increased compared to the previous month (2.2%, m/m vs. 1.1%, m/m in September). The cumulative PPI-inflation for 10M2007 stood at 18.3% (15.8% in 9M2007). Most of the increase in prices was seen in manufacturing (2.6%, m/m), in the mining industry (2.3%, m/m) and in the coke and refined petroleum industry (7.7%, m/m mainly due to coke production prices increase of 14.4%). The increase in food (producer) prices was caused by a seasonal price increase in the raw food such as milk and flour causing milk and bread production prices to rise by 9.3% and 4.4%. The non-food producer price growth was mainly caused by the increase in both world and domestic oil prices. In particular, the average domestic fuel prices rose by 11.8% in October, comparing to 2.6% in the 3rd Q2007, according to Millennium Capital analytic department with reference to Ukrainian Economic Ministry.

The rise in PPI is mostly dictated by the rise in world prices, since Ukraine is a fairly open economy. The PPI influence on CPI is about 0.5 - 1 year and so the experts expect to see relatively high CPI-inflation during the next year, similar to what Ukraine experiences in the current year.