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

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.