Bloomberg News

Ukraine’s Inflation Rate Unexpectedly Falls to 8-Year Low

December 07, 2011

(Updates with comment from economist in fourth paragraph.)

Dec. 6 (Bloomberg) -- Ukraine’s inflation rate unexpectedly declined in November to its lowest level since May 2003 as a record grain harvest helped ease food costs.

Consumer prices rose 5.2 percent from a year earlier compared with 5.4 percent in October, slowing for a fifth month, the state statistics committee in the capital, Kiev, said today on its website. That’s below the 5.7 percent median estimate of 11 economists in a Bloomberg survey. Prices rose 0.1 percent from the previous month.

Inflation may slow to 7.5 percent this year from 9.1 percent in 2010, central bank Governor Serhiy Arbuzov said last month. That would be the lowest rate since 2002. Prime Minister Mykola Azarov’s government and the central bank are targeting inflation below 10 percent next year, slowing to 5 percent in 2014, a rate that’s optimal for economic growth, according to a statement today on the bank’s website.

The regulator “is unlikely to cut its policy rates as the recent inflation slowdown was largely caused by a reduction in unprocessed food prices and can hardly be considered sustainable,” Iryna Piontkivska, an economist at Troika Dialog in Kiev, said by phone. The central bank’s main discount rate is 7.75 percent.

Producer prices, an early indicator of inflation, rose 17.3 percent in November from a year earlier and advanced 0.6 percent from the previous month, the statistics committee said.

--With assistance from Zoya Shilova in Moscow and Harumi Ichikura in London. Editors: Andrew Langley, Jennifer Freedman

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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