Ukraine`s inflation reaches critical level - Stelmakh
National Bank head Stelmakh told the parliament
Ukraine`s rampant inflation has become critical, head of the National Bank of Ukraine Vladimir Stelmakh told the country`s parliament today, according to RBC. He added that the prices had been pushed up by higher disbursements from the state budget.
Stelmakh explained that inflation stood at 9.7 percent in the first quarter 2008, exceeding the forecast of 9.6 percent. Simultaneously, in Q1 2008 state spending increased 45 percent compared to the same period a year earlier, while in Q1 2007 it rose only 15.5 percent. Personal incomes increased 47 percent in Q1, but the economy cannot provide for enough products to match the amount of cash available so far.
The government has drafted a number of measures to curb inflation in cooperation with the National Bank, Stelmakh said, noting that the bank was not too content with the measures suggested by the cabinet, as the Agriculture and Industrial Policy Ministries have not yet come up with any steps to boost product offering. Among the proposed measures Stelmakh named an increase in obligatory reserves of commercial banks in the first quarter and the stemming of the growth of the monetary base.