KIEV, June 18 – Prime Minister Yulia Tymoshenko on Wednesday temporarily postponed plans for amending the 2008 budget after President Viktor Yushchenko criticized its new inflation forecast as too optimistic.

The government last week revised its inflation forecast to 15.3% in 2008, up from 9.6% predicted originally, but Yushchenko refused to accept the figure, suggesting real inflation may be bigger.

“To approve the amendments we need to approve new macroeconomic indicators,” Tymoshenko said. “At a meeting with the president [over the indicators on Tuesday], he took a time-out.”

The skyrocketing inflation has been topping Ukraine’s most urgent macroeconomic problems with the State Statistics Committee reporting inflation at 31.1% between May and May 2007.

The International Monetary Fund forecast Ukraine’s inflation at 17.7% in 2008, while domestic analysts see the inflation even higher than that at the end of the year.

Mykola Azarov, a former finance minister and a senior member of the opposition Regions Party, said Wednesday that Ukraine’s inflation will probably be between 20% and 25% in 2008, blaming Tymoshenko for inconsistent anti-inflation policy.

Standards & Poor’s, also unimpressed with Tymoshenko’s anti-inflation policy, last week downgraded Ukraine's long-term foreign and local currency credit ratings.

Tymoshenko said the government has already agreed the new inflation indicator with the National Bank of Ukraine, a key demand from Yushchenko, but she had declined to cite the figure.

The president also criticized the government for seeking to administratively restricting price increases, a policy that Yushchenko has said was “wrong.”

Yushchenko also criticized the NBU for letting the hryvnia steeply appreciate against the U.S. dollar last month, and said the move has been in fact reducing supply of hryvnias to the economy and thus slowing down manufacturing.

Yushchenko’s main concern was that the growing inflation may start affecting Ukraine’s economic growth, and urged Tymoshenko to approve the budget amendments that would stimulate the expansion.

Yushchenko said that capital investments, banking crediting and international borrowing, the chief propellers of robust economic growth over the past years, had been declining this year, a sign that the economy may start to slow down. (tl/ez)