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 Ukrainian Politics, Economics
  2789

 Ukraine is Expecting a Price Rise on Bread and Utilities

As soon as the polling stations closed, Ukraine once again hears rumors regarding bread prices. After the election battles people believe it. On the morning of the second day many stores put out new price tags and people rushed to make stocks.

TSN reports the authorities acknowledged that Kyiv retailers provoked the panic. Kyivkhlib indirectly through someone said that the bread prices may rise. Capital grain monopoly spat on public concern and did not explain anything, thus heating up the hype. When they came to their senses, the government officials and retailers have begun claiming that there is no reason for a price rise on the #1 product.

These statements were denied by farmers. According to them bread prices need to rise and it will be around 10%.

After the elections, the economy is almost free from political pressure. The government will no longer hold back prices artificially and they will be formed exclusively by economic laws.

Bread is just the tip of the iceberg. In the nearest future the durable goods are at risk: home appliances, cars, especially imported.

The hryvnia fell and the dollar hiked right after the elections. This week it has reached a three-year maximum - 8 hryvnia 19 kopecks. Last time a high like this was recorded in November 2009. The National Bank was artificially maintaining the hryvnia rate before the elections in order not to hit the regime's ratings but there are other causes for the loss of money:

- The decline in steel prices in the world markets, and therefore, the loss of export;

- high prices for Russian gas which is paid for in currency;

- problems with the IMF, and consequently a lack of foreign currency loans.

Hryvnia will continue its decline further though it will not be radical, the optimistic experts say.

However, experts advise to keep deposits and take out loans in hryvnia - the banks are still offering reasonable rates. The interests of the citizens, bankers, and politicians are the same here.

However, the Ukrainian economy dictates harsh perspectives. Unchecked by election campaign, the government will soon have to raise utility tariffs, the experts say.


 
 
 
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