The Washington Post: inflation in Ukraine reaches 272%

According to the latest official data, the year-over-year inflation rate in Ukraine is 28.5%, a figure that is probably greatly underestimated. At present, Ukraine’s implied annual inflation rate is 272%, according to a report by Matt O'Brien in his blog in The Washington Post, with reference to the U.S. Professor of Applied Economics at Johns Hopkins University Steve Hanke, Voice of America has reported.

"Hyperinflation is always and everywhere a political phenomenon. It happens after wars or revolutions, when governments have to print the money they need because there's not much of an economy left to tax—which brings us to Ukraine," the author writes.

According to the professor, the Ukrainian economy has declined as compared with 1991, "because communism never really did end."

"Ukraine just traded party bosses for oligarchs. Sure, it privatized companies and introduced markets, but Ukraine didn't shed its Soviet-era corruption or inefficiency, as a result, even more of the economy entered the shadows. The IMF estimates that Ukraine's underground—and non-tax-paying—economy is as much as 50%of GDP," O'Brien wrote.

"The good news, if there is any, is that the IMF money should stabilize Ukraine's currency, and with it their inflation. The not-so-good news, though, is that even with this money Ukraine will still have to do a lot of austerity. And the bad news is that it will have to really raise rates, knee-capping growth even more, to rein in the inflation it already has. Everything that would save Ukraine's currency, in other words, would make its economy worse in the short-term. But it can't have a decent economy in any term if it doesn't stop its currency's free fall. So even if everything goes right, Ukraine's in for a lot of pain," the author concludes.

There are no good choices when you're bankrupt, O'Brien concluded.