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Consumer prices increased by 79% during 2014-2015 against the backdrop of a weaker hryvnia and increased tariffs for utility services, according to Olena Bilan, the chief economist at Dragon Capital.
"Over the last two crisis years, consumer prices rose by 79% against the backdrop of almost a threefold increase in public utilities tariffs (+173% in 2014-2015), as well as the weakening of the hryvnia from 8 UAH/USD in late 2013 to 24 UAH/USD in late 2015," Bilan said.
The rise in prices (by 20 percentage points) in the past two years has been attributed to the increase in housing and utility tariffs, with the remaining share mostly caused by the weakening of the national currency. While decline in oil prices has mitigated only slightly an impact of the weak currency on inflation, according to the expert.
"Since the hryvnia has remained largely stable since March last year, the effect of the currency devaluation has been fully realized itself in consumer prices, and should not create additional pressure on inflation," Bilan said.
Taking into account the expected scheduled increase in utility tariffs, the inflation is expected to slow down to 14% year-over-year at the end of 2016 due to the effect of the comparison base, as well as rigid fiscal and monetary policy.
"This forecast is based on expectations of a relatively stable exchange rate. However, each further weakening of the hryvnia by 10% will add an estimated 3 percentage points to the inflation rate, with its full effect being translated into prices within five-six months," she added.
As UNIAN reported earlier, inflation in Ukraine rose to 43.3% in 2015 (December 2015 to December 2014) as compared with 24.9% recorded in 2014, hitting the highest level over the past 20 years, according to the State Statistics Service. In December 2015, inflation slowed down to 0.7% against November 2015, from 2% recorded a month earlier.
In 2014, consumer prices in Ukraine increased by 24.9%.