Prices in Ukraine for six months are higher than in Europe

The consumer price index in Ukraine in 2017 may be higher than the forecast of 8.1%, budgeted from the previous year

The main growth in consumer prices emerged in the first half of the year, and in the second half of the year is expected to slow, including at the expense of deflation in July and August. However, if deflation happens, it will accelerate the annual rate of inflation.

Price pressure will form in the autumn. With the active exports and low yield, is formed inside the deficit, which will push prices up. With the reduction of budget revenues due to the economic slowdown and possible increase in excise duties on certain excisable goods.

Inflation for the year may exceed the budget forecast, and to reach 11,5-14,5% amid rising prices for food and regulated tariffs in the first half of the year. Strengthen the inflation rate fluctuations of hryvnia exchange rate below 28 per dollar, which will increase the cost of energy and fuel.

The depreciation of the hryvnia to 27.5-28 per dollar and more, in his opinion, will put pressure on prices of imported goods, since the revision in energy prices and fuel will fall on the final consumer. In addition, the global price situation on the market of oil and gas can weaken and strengthen this trend.

Increase of pensions and salaries will only slightly affect inflation. If the market is trying to warm up speculative prices, but end-demand will be low, speculative growth will stop. Higher payments will then be used to pay for public services, while reducing the level of subsidy.

Annual growth of consumer prices in Ukraine in the first half of the year reached the highest level among the countries of Europe and CIS countries — 15,6%. The current figure is twice as high as in June 2016, exceeding the refinancing rate of the NBU (12.5%) and the budget benchmark at the end of the year. Average inflation in most countries of Europe is 1.8%, in the CIS countries is 7.3%. High growth rates of consumer prices were also noted in Azerbaijan (13.8 percent), Turkey (10,9%) and Tajikistan (8.7 percent).