There is risk of higher inflation this year - Prime Minister Azarov
2011-01-12 17:56:20
Prime Minister Mykola Azarov pointed out the inflation rise risks that exist in Ukraine due to world food prices rises.
Azarov said that last year a negative effect on inflation was caused by excessive demand for food. However, the government, despite the rise in food prices on the world market and the drought in Ukraine, duly responded to the price crisis, and price spikes were stopped in the fall of 2010.
The Prime Minister noted that the United Nations' Food and Agriculture Organization predicts a further increase in food prices in the world. The causes behind that are: global climate change, rising food consumption in the most populous countries - India and China, structural calculations of agricultural producers and uncertainty in the world financial markets. Such factors can not be offset within 2-3 years.
"So, Ukraine can not rely on compensation of risks in the domestic market, created by the backwardness of our agricultural industry, at the cost of external markets," Azarov said.
According to the State Statistics Service, inflation in Ukraine in December 2010 compared to November 2010 amounted to 0.8%; at the beginning of 2010 (against December 2009) 9.1%.
According to experts, today the prices of vegetables in Ukraine exceed European. The reasons for this situation are low efficiency of vegetable production in Ukraine, as well as underdeveloped infrastructure of storage, transportation and marketing.
The 2011 state budget provides for inflation rate of 8.9%.
Analysts' forecasts for growth in consumer prices this year range within 9.5-12%.