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 Massive Inflation is Coming to Ukraine by the End of the Year, Says the National Bank

For the first time this year the National Bank stated that the price decrease will come to an end this fall - by the end of the year they expect 4-5,5% inflation.

In the nearest months Ukrainians will see price increase caused by seasonal factors and possible growing prices in the world food market, reports the National Bank of Ukraine.

Experts reacted to the NBU statement differently, but tend to think that there will be no economic cataclysms this year.

"The National Bank states what will most probably happen and it is doing the right thing. It decreases a certain commotion and the population's inflation expectations, warning the people that by the fall everything will be more expensive, so it comes as no surprise. And it also explains why it will happen like it is done in Europe", says Forex Club CEO Nikolay Ivchenko.

The reason for growing prices is the appreciation of oil and food products in the world and traditional fall hike of business activity. It will have only positive influence on the economics of Ukraine. In Ivchenko's opinion, the inflation this year is expected to be no higher than 5.5% (as of right now we have price decrease of 0.1% from December, 2011).

The President of Ukrainian Analytical Center Aleksandr Ohrimenko notes that the inflation will be also stimulated by the pre-election increase of pensions, government wages, and welfare payments. The National Bank has realistically evaluated the situation realistically and carefully let people know that the basis for the price growth is rather strong but not critical and by the end of the year everything will be all right. The inflation will be less than 4% and there is no sense to panic and buy currency. Moreover, cheap vegetables will provide for official deflation of 0.1-0.3% in August and the prices will start growing only in September.

Another analyst Aleksander Zholud thinks that the NBU has not really said anything but simply reminded everyone that the situation is under control: "The prices will start to go up - about 1% in September. But this happens every year and by December we will have inflation of less than 5%".

 
 
 
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