Ukraine’s inflation rate, the highest in Europe, slowed for a second month in March as real wages fell, weakening domestic demand, Bloomberg reported.
The annual inflation rate declined to 18.1 percent in March, from 20.9 percent in the previous month, the Kyiv-based state statistics committee said today on its Web site. The median forecast of seven economists in a Bloomberg survey was for a 17.6 percent rate. In the month, prices rose 1.4 percent, after a 1.5 percent gain in February. Producer prices increased 1.1 percent in March from the previous month.
Ukraine has been struggling to stem inflation after the global financial crisis sent its currency tumbling, forcing import prices higher. The hryvnia has lost about 9 percent against the euro in the past month. The government has pledged to contain inflation to 9.5 percent this year, compared with 22.3 percent in 2008.
Ukraine’s economy faces its first contraction after nine years of growth after demand for its products, such as steel and chemicals, plummeted and global trade faltered. The country’s average real wage declined 14.1 percent in February from the same month a year ago, according to state statistics data.
The government has failed to live up to its target of keeping inflation below 10 percent since 2003.
