Inflation begins to slow
12 May 2008
Published in
Inform
issue #70
See the full issue here.
Ukraine’s inflation rate rose 3.1 percent last month, and although this was lower than the 3.8 percent rise in March, it was nevertheless seized upon by the government’s critics.
During April the annual inflation rate breached the 30 percent barrier on the back of an almost 50 percent hike in food prices. Ukraine is not alone. Food commodities around the world have soared in recent months, causing civil unrest in a number of countries.
Addressing a government meeting, Prime Minister Yulia Tymoshenko acknowledged the seriousness of the issue and took a crumb of comfort from statistics revealing a slowdown in the trend.
See the full issue here.
Ukraine’s inflation rate rose 3.1 percent last month, and although this was lower than the 3.8 percent rise in March, it was nevertheless seized upon by the government’s critics.
During April the annual inflation rate breached the 30 percent barrier on the back of an almost 50 percent hike in food prices. Ukraine is not alone. Food commodities around the world have soared in recent months, causing civil unrest in a number of countries.
Addressing a government meeting, Prime Minister Yulia Tymoshenko acknowledged the seriousness of the issue and took a crumb of comfort from statistics revealing a slowdown in the trend.
“As far as inflation is concerned, we have a
considerable slowdown of price growth compared with
the previous month. The prices of more than 20
staples of food have started to fall,” said Ms
Tymoshenko.
The government, which cracked down on food prices by setting caps, applauded measures taken by the National Bank. These involved measures to soak up the liquidity of the hryvnia, its issuance of large amounts of depository certificates, and a more liberal attitude towards the
exchange rate, now operating within a less restrictive band against the US dollar.
First Deputy Prime Minister Oleksandr Turchynov stressed the need to continue to withdraw hryvnia from circulation in order to dampen price rises. Then addressing budgetary issues, he warned that there may be repercussions if the government’s privatisation plans are not unblocked. He suggested the government may be forced to reduce the amount it allocates to infrastructure programmes. This could have an adverse impact on the country’s preparations for the UEFA Euro 2012 soccer tournament, which requires wide-scale modernisation of roads, rail and airports as well as a major hotel building programme.
“Those hell-bent on sabotaging the finances better think again,” said Mr Turchynov.
Assuaging concerns, Ms Tymoshenko once again stressed the government’s forecast that measures to curb inflation were on track and would bear fruit in the second half of the year. “In June we will have absolutely positive tendencies and positive dynamics,” she said. Deputy Prime Minister.
The government, which cracked down on food prices by setting caps, applauded measures taken by the National Bank. These involved measures to soak up the liquidity of the hryvnia, its issuance of large amounts of depository certificates, and a more liberal attitude towards the
exchange rate, now operating within a less restrictive band against the US dollar.
First Deputy Prime Minister Oleksandr Turchynov stressed the need to continue to withdraw hryvnia from circulation in order to dampen price rises. Then addressing budgetary issues, he warned that there may be repercussions if the government’s privatisation plans are not unblocked. He suggested the government may be forced to reduce the amount it allocates to infrastructure programmes. This could have an adverse impact on the country’s preparations for the UEFA Euro 2012 soccer tournament, which requires wide-scale modernisation of roads, rail and airports as well as a major hotel building programme.
“Those hell-bent on sabotaging the finances better think again,” said Mr Turchynov.
Assuaging concerns, Ms Tymoshenko once again stressed the government’s forecast that measures to curb inflation were on track and would bear fruit in the second half of the year. “In June we will have absolutely positive tendencies and positive dynamics,” she said. Deputy Prime Minister.