Ukraine inflation unsustainable-IMF head

09:22, 14 July 2008
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"It takes afterward a very long time to sort out the consequences..."

Ukraine`s rate of inflation, with accumulated price rises of 15.5 percent for the first half of 2008, is "absolutely unsustainable", the Managing Director of the International Monetary Fund said on Friday, according to Reuters.

"The rate of inflation that you have today is a rate of inflation that is absolutely unsustainable for social reasons and for economic reasons," Dominique Strauss-Kahn told reporters at a conference in Ukraine`s Black Sea resort of Yalta.

"You can have such a situation for a very short term and not for the long term. Even if you live with it for a short term it takes afterward a very long time to sort out the consequences."

Month-on-month inflation slowed to 0.8 percent in June, compared with 1.3 percent in May and a peak of 3.8 percent in March. Year-on-year inflation measured after the first six months of the year stands at 29.3 percent.

The government this week raised its year-end inflation target to 15.9 percent against 16.6 percent in 2007.

Economy Minister Bohdan Danylyshyn said on Thursday the government and central bank had agreed to maintain this year`s rate at a level no higher than the 2007 figure.

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