The head of Ukraine`s central bank said on Sunday he saw signs of a revival in the economy, little more than a month after he accused the government of pursuing policies that were leading to stagflation, according to Reuters.

Volodymyr Stelmakh, speaking on the sidelines of the EBRD annual meeting, said he now believed the government had done "a great deal" to stimulate output growth.

"We are seeing positive rates of GDP growth, industry is starting to move...," Stelmakh told reporters.

"The recession, stagnation is evening out. The government has, it must be said, done a great deal in different areas. Production is picking up."

Stelmakh last month told parliament he saw a "forerunner of stagflation" -- a combination of high inflation and slow growth -- brought on by Prime Minister Yulia Tymoshenko`s policies of boosting social spending. He said the situtation could have "serious negative consequences" for the country.

In his latest comments, Stelmakh said inflation, which stood at a record just below 30 percent year-on-year in April, could start to decline from this month.

Month-on-month inflation in April stood at 3.1 percent, down from a record 3.8 percent figure a month earlier.

Stelmakh said that if the April figure proved correct, "we can then speak about a positive trend because we saw very high consumer demand in April with the Easter and May Day holidays.

"I hope that if this indicator is straightforward, it gives us grounds to hope that inflation will come in below three percent and lower from then on in."

But he discounted a notion, expressed by a deputy economy minister on Saturday, that a good harvest could bring down inflation to the extent that Ukraine would experience month-on-month deflation in the summer.

Ukraine`s government had targeted inflation of 9.6 percent throughout 2008, but that figure was exceeded by month-on-month cumulative figures in the first three months of the year. Experts polled by Reuters predict annual inflation of 21.6 percent in 2008.

Officials are sticking to a growth forecast of 6.8 percent, compared to 7.6 percent last year.