Ukraine’s inflation rate fell in April for a 10th month to the lowest since January 2003 after a good harvest of vegetables damped price growth, the state statistics committee said.
Consumer prices rose 0.6 percent from a year earlier, less than economists forecasted, compared with 1.9 percent in March, the committee, based in the capital Kiev, said in a statement today. The median estimate of nine economists in Bloomberg survey was 1 percent. On the month, prices were unchanged.
Slowing inflation allowed the central bank to cut its main interest rate on March 22 for the first time in two years to spur the former Soviet nation’s economy. The rate was lowered 0.25 percentage point to 7.5 percent. Gross domestic product rose 1.8 percent in the first quarter, the slowest pace since the 2009 recession, data showed on April 28.
“Inflation will speed up from July as the vegetable and fruit harvest will be smaller this year,” said Olena Bilan, chief economist at Kiev-based Dragon Capital investment bank. “Higher social payments will also spur domestic demand, pushing consumer prices up” and helping “the economy to grow.”
President Viktor Yanukovych promised to start raising social spending this month before parliamentary elections scheduled for October as the government seeks to strengthen domestic demand to boost the economy.