Ukraine reports drop in inflation

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Ukraine in 1996 finally began to pull down an inflation rate that over the last four years had spiraled out of control. The Ministry of Statistics announced on January 4 that in 1996 inflation dropped to a "mere" 39.7 percent for the year, with a December figure of 0.9 percent.

The numbers are way down from the 10,000 percent inflation rate of 1993, when Ukraine had one of the highest rates in the world. In 1995 inflation reached 380 percent, according to the World Bank.

Commenting on the December figure, presidential economic advisor Valeriy Lytvytsky called it a "remarkable achievement," but made clear that it should not be overestimated. He said the uncertain budget and insufficient financial instability could reignite inflation.

Mr. Lytvytsky explained that if Ukraine could maintain a stable rate throughout 1997 it would give investors confidence that their investments will not evaporate and would allow for the long-awaited upturn in the economy following a five-year plunge.

In 1996, the cost of services grew most dramatically, by 212 percent, while food prices grew by 17.4 percent. Other items rose by 18.8 percent. The 1997 Cabinet of Ministers budget, which is languishing in the Verkhovna Rada, predicts a 1997 inflation rate of 25 percent.

Copyright © The Ukrainian Weekly, January 19, 1997, No. 3, Vol. LXV

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