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Ukraine's Ministry of Economic Development and Trade forecasts insignificant inflation early in 2016 as inflation dynamics will remain slow, according to a posting on the ministry's website.
"Higher inflation risks in early 2016 may stem from hidden inflation caused by households' low purchasing power in 2015 – the so-called pent-up demand," the posting said.
Additional negative factors are devaluation expectations against the backdrop of further deterioration of trade and economic relations with Russia, a halt to the third tranche from the International Monetary Fund, Ukraine's key creditor, and escalation of the hostilities in the east of the country.
Earlier, the ministry reported that last year inflation in Ukraine reached the highest level over the past 20 years, soaring to 43.3% mainly due to the weakening of the hryvnia, which had also hit all-time lows against the U.S. dollar. In addition, an increase in utility tariffs, as well as higher prices of vegetables and fruits further pushed inflation up.
The highest price hikes were those of natural gas, going up by 3.7 times. Hot water and heating tariffs increased by 78.4%. Electricity rates rose by 66.9%. Prices of vegetables grew by 66.7%, those of sunflower oil and eggs by 59.4% and soft drinks by 57.8%.
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, according to the State Statistics Service.
In December 2015, inflation slowed to 0.7% against November 2015, from 2% recorded a month earlier.