The Cabinet of Ministers of Ukraine has denied allegations by experts about a high inflation rate in 2011, in particular, that it could reach 15%, the media liaisons office the Cabinet of Ministers' secretariat has said in a statement.

The government also expressed its position on the conclusions made by an author of an article about high inflation: "Having analyzed the mentioned article, it is clear that the assumption on a possible inflation rate of 15% has been confirmed by nothing and is solely the author's imagination," the statement reads.

In addition, government experts said that the figures published in the article were misleading, and their purpose is "to discredit the executive branch of government."

According to the statement, the government notes that despite possible spending on the state recapitalization of banks, such spending will not affect the rate of inflation, while the National Bank of Ukraine has enough instruments to curb inflation in the projected framework.

In the statement, the Cabinet of Ministers also denied allegations that a smaller volume of grain harvest in 2010 caused a rise in food prices and consumer demand in 2010 "was not in a deplorable state."

"Through his article, the author also tries to impose on readers a view that the rise in the cost of housing and utility services will be most critical for inflation. It is a distortion of the facts, because during the drafting of a forecast for the social and economic development of Ukraine for 2011 to calculate the consumer price index assumptions were laid about changes in administratively regulated prices/tariffs," reads the statement.

The government noted that the policy of raising social standards would be more balanced and aligned with the real possibilities of the economy. "The strengthening of public confidence in the national currency and the banking system, which will influence the growing propensity to save, will also have a positive effect on inflation processes. Another factor curbing inflation will be the harvest of grain crops in the amount required to meet domestic requirements," reads the statement.

The statement also reads that the Cabinet of Ministers and the National Bank of Ukraine have currently drafted and are implementing a joint plan on the transition to a regime based on price stability. In addition, in order to conduct agreed anti-inflationary policy, the sides have taken a number of administrative actions to stabilize the situation, in particular, increased control to prevent the anticompetitive agreed actions by economic entities and the abuse of monopoly position on the markets of socially important goods and services.

The forecast for a possible increase in inflation rate to 15% in 2011 was earlier made by Astrum analyst Oleksiy Blinov.

According to the State Statistics Service, the indexes of consumer prices and industrial producer prices in January 2011 amounted to 1% and 1.3% respectively. In January 2011 compared to January 2010, inflation reached 8.2%.

The government's forecast for annual inflation rate is 8.9%.

UKRINFORM