Ekaterina Kornienko
Director the Ukrainian Association of Retail Suppliers Oleksiy Doroshenko warns that inflation in 2016 may be higher than the government's forecast of 12% and may reach 20%-25%.
"It is impossible to reduce the inflation rate four times in one year," Doroshenko said at a press conference in Kyiv.
"So, a 20%-25% [inflation in 2016] is quite probable," he added.
Doroshenko also noted that with the inflation rate of about 45% in 2015, commodity prices grew very unevenly. FMCG rose significantly, especially food prices. Under this group of goods, the inflation rate was 50-70% last year, according to the expert. Thus, prices of vegetables rose in October and November by 80%, while the annual increase was more than 100%. A rapid growth in prices was recorded for flour, bread and pasta. Doroshenko expects the trend will also continue in 2016, and such products as bread, flour, pasta, chicken and inexpensive meat, vegetable oil and dairy products will be the most exposed to price shifts.
Read alsoUkraine’s economy to slowly rebound in 2016, reoriented toward West: StratforThe expert also noted an influence of a declining purchasing power of the Ukrainian population.
"Currently, the level of purchasing power is dwindling to the level when people spend most of their income on food, while not necessarily on the expensive products," Doroshenko said.
"The inflation helps the government pay all social benefits. And if there are no other sources of revenue [other than printing money – UNIAN], we will see a rise in inflation again," the expert said.
Read alsoInflation in Ukraine reaches 20-year peakAs UNIAN reported earlier, last year, the 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 has 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%.