Deflationary trends are continuing in Ukraine, with inflation standing at 0.8% in the first nine months of 2012, compared to 0.9% in January-August 2012.

The head of the group of advisers to the governor of the National Bank of Ukraine (NBU), Valeriy Lytvytsky, announced this in comments to a UKRINFORM correspondent on Thursday.

"0.8% is a new historic low for this period. Compared to December, deflation shrank from 0.4% to 0.3%, and deflation was higher only in 2002 - (minus) 3.3%," Lytvytsky said.

He said that inflation in September rebounded (0.1%) after a four-month deflationary pause and repeated a historic low for this month recorded last year (0.1%).

Lytvytsky also noted that the growth of industrial producer prices had decreased to 0.2% from 0.5% in August. This could be a sign of the further curtailment of activity in basic economic branches.

The head of the group of advisers to the NBU governor confirmed his forecast that consumer inflation in 2012 could be lower than last year. If this happens, deflationary trends in Ukraine will be the longest - four years.

The trend of the depreciation of the real effective exchange rate (REER) will most likely continue in September.

Lytvytsky said that low inflation at the start of the last four months of the year would help demobilize post-election expectations of devaluation of the exchange rate and contribute to its stability.

Statistics for September, he added, increases the prospect of preserving this year the positive dynamics of GDP growth in real terms, not just in nominal terms.

In addition, the prevalence by two to three times of the rate of growth in real income and wages of the public, compared with last year's period, can gain a foothold.

Low inflation trends preserved in September open up additional opportunities to stimulate consumer and investment demand amid the inviolability of price and exchange rate stability, Lytvytsky said.

Ukrinform