Deflation in Ukraine reaches 0.3% in May, 0.5% over year, says statistics service

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Jun. 06, 2012 12:05
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The hryvnia has been relatively stable in the past few years since Ukraine's currency has a fixed exchange rate. In the last decade the nation’s inflation reached its zenith in 2008 experiencing a year on year inflation rate of 30% after which it has been steadily decreasing. According to The Economist, in 2008 Ukraine showed its initial steps of slowly moving toward a floating exchange rate; nevertheless, political instability and strong sensitivity to external shocks warns the National Bank of Ukraine to be careful.
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Consumer prices in Ukraine dropped by 0.3% in May 2012, or by 0.5% year-over-year, the State Statistics Service of Ukraine reported on Wednesday.
Inflation in the country was 0.4% at the beginning of the year, according to the statistics service.

As reported, inflation in 2011 slowed to 4.6% from 9.1% in 2010, hitting a record low since the country gained independence in 1991. The previous best record was posted for 2011 at 6.1%, while 0.6% deflation was posted for 2002.

The government expected inflation this year to speed up to 7.9%. The state budget for 2012 was built based on this inflation forecast. According to the statistics service, inflation is slowing down and changed to deflation in May. In particular, inflation was 0.2% per month in January and February, 0.3% in March, and 0% in April. As reported, inflation in Ukraine in annual terms, i.e. compared to the same month last year, slowed to 0.6% from 1.9% in March and 3% in February.

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