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Prices will go up
27.12.2011 15:19 "Agro Perspectiva" (Kyiv) —
The National Bank of Ukraine forecasts for 2012 acceleration of inflation to 7%, although the consumer market is expected to complete the outgoing year with a five-percent rise in the prices of goods and services. Such a low forecast may come true in 2012 only if the government ensures Russian gas price reduction and the harvest is as good as this year, according to the Kommersant Ukraine.
NBU’s forecast is more optimistic than the government’s assessments. The state budget for 2012 was developed with an increase in prices by 7.9%. However, having reduced the GDP growth forecast for 2012 from 5% to 3.9%, the Cabinet has not changed the inflation forecast. The appearance of a positive forecast is due to the current low inflation. The government in 2011 pledged to keep inflation at a level no higher than 8.9%, but in 11 months prices rose by only 4.4%. This enabled the Cabinet to begin to focus on braking inflation to 5%, for which goods in December got only 0.5% more expensive. This will be a record annual rate since 2002 (when prices fell by 2.4%). However, experts do not tend to expect inflation fall in 2012. Next year there may be no factors securing the current low inflation: a good harvest and the lack of a significant increase in tariffs for housing and utility services. Utility services make 10.6% of the consumer price inflation. The largest share in the structure of inflation belongs to food products (53.5%). Due to the high yield, which has lowered the cost of fruits and vegetables (5.1% and 3.4% shares, respectively), in January-November food prices rose by only 1.5%. «Given the imperfection of Ukrainian storage facilities, in early 2012 price growth will resume, and its dynamics in the second half of the year depends on the next harvest,» the head of the analytical department with the TASK investment group, Andriy Shevchyshyn, says.
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