KIEV, Nov. 7 – Ukraine’s consumer price hike accelerated in October, pushing inflation over the past 10 months to levels that far exceed the government’s forecast for the entire year of 2008.
Consumer prices increased 1.7% on the month in October, up from 1.1% in September, pushing the cumulative inflation to 18% in January-October, according to the State Statistics Committee.
The released figure exceeds the government’s inflation forecast of 15.9% for the entire year of 2008, with consumer prices demonstrating the highest growth since 2000.
“The figures should be taken without an excessive euphoria,” Valeriy Lytvytskiy, the chief analyst at the National Bank of Ukraine, said. “According to my estimates, the annual inflation [in 2008] will be the second highest since the hryvnia has been introduced. The bigger inflation was only in 2000.”
In 2000, Ukraine recorded inflation at 25.8%, while consumer prices had increased 23.2% in 12 months through the end of October, according to the committee.
Mykola Azarov, a former finance minister and a senior figure at the opposition Regions Party, earlier this year predicted inflation at between 20% and 25% in 2008.
Food prices rose 1.1% on the month in October, while housing and utilities costs rose 4.4% on the month, healthcare expenses rising 1.5% and transportation costs growing 1%, according to the committee.
“The acceleration of inflation comes jointly with slowing pace of economic growth,” Lytvytskiy said. “We don’t yet know what happened in October, but based on producer prices the weakening has continued in October.”
“At the start of the fourth quarter, the NBU has all thek reasons to pay attention to signs of stagflation,” Lytvytskiy said. “The signs suggest that economic growth weakens, while inflation accelerates.”
An opinion poll, taken in September, indicated that almost half of Ukrainians wanted Prime Minister Yulia Tymoshenko to resign if her government fails to curb mounting inflation that has been topping their list of concerns.
But 17% of respondents – a surprisingly strong figure - said Tymoshenko must stay in power no matter what happens, underscoring the core of Tymoshenko’s voter support base, the poll unveiled.
The poll by the Kiev International Institute of Sociology showed that potential failure to curb inflation in Ukraine is the main concern among the voters, as 48% said this would justify Tymoshenko’s resignation. (nr/ez)
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