Ukraine leader vetoes anti-inflation price controls

10:20, 04 June 2008
689 0

He said the law was at variance with Ukraine`s constitution

Ukrainian President Viktor Yushchenko on Tuesday vetoed a law imposing price controls on staples which the government had championed to curb record inflation, according to Reuters.

Prime Minister Yulia Tymoshenko, his on-again, off-again ally, meanwhile said efforts to reduce price rises had borne fruit and predicted inflation would begin to come down this month.

Yushchenko, at odds with the prime minister on a wide range of issues, struck down a law capping mark-ups on prices of key food products including flour, bread, meat and vegetables at 15 percent.

He said the law was at variance with Ukraine`s constitution and civil code, hurt competition and "violated the right of owners of goods to deal with them as they see fit. Practically all sections of the law give rise to objections."

Government officials had lobbied for the law on the grounds that high rates of inflation were linked to unjustified price increases on food, which accounts for more than 50 percent of the consumer price index (CPI) basket.

Analysts have said price rises are also linked to large social payments overseen by Tymoshenko and her government.

Yushchenko last week issued the latest in a series of appeals to the government to take steps to rein in inflation.

Year-on-year inflation hit 30.2 percent in April and cumulative price rises over the first four months of the year have reached 13.1 percent -- exceeding the government`s forecast of 9.6 percent for the entire year.

No new government inflation forecast has been issued.

Tymoshenko, speaking after meeting regional officials, said she believed the month-on-month inflation figure to be issued for May would be "close to the minimum".

Her press service quoted Tymoshenko as saying that data compiled from the regions showed consumer prices had even fallen in May in six of Ukraine`s 27 regions. She pledged to bring down the figure in the remaining areas.

She gave no forecast for May month-on-month inflation.

Yushchenko last week predicted the figure would slow to 1.0 percent in May from 3.1 percent in April. The head of Ukraine`s central bank forecast a figure of 1.5 to 2.0 percent and analysts surveyed by Reuters on Monday expected 2.1 percent.

Reuters, Guardian

If you see a spelling error on our site, select it and press Ctrl+Enter