Ukraine: Inflation skyrockets to over 60% in crisis-hit Ukraine

Consumer prices increased 14.0% in April over the previous month, which was notably above the 10.8% rise registered in March. April’s significant acceleration was driven by a dramatic jump in the prices of housing, water, electricity, gas and other fuels. Ukraine had to reduce drastically the state energy subsidy, one of the IMF mandated reforms to secure the USD 17.5 billion bailout in March.

Inflation continued surging upward, reaching 60.9% in April, the highest rate in over a decade. The result was drastically up from the 45.8% tallied in March. Inflation has skyrocketed since the onset of the military conflict in Eastern Ukraine, pushed up by sharp increases in the price for gas along with a drastic depreciation of the hryvnia. In addition, annual average variation in consumer prices increased from 20.8% in March to 25.3% in April, which marked the highest level since February 2009.

FocusEconomics Consensus Forecast panelists expect inflation to end 2015 at 26.8%, which is unchanged from last month’s forecast. For 2016, the panel sees inflation easing to 12.5%.