Ukrainian inflation, the fastest in Europe, surged for a 15th consecutive month after a plunge in the national currency and an increase in household utility bills.
The rate quickened to 60.9 percent in April, the highest since at least 2006 and up from 45.8 percent in March, the statistics office said Wednesday on its website. That exceeds the 51.7 percent median estimate of five economists in a Bloomberg survey. Consumer prices rose 14 percent from the previous month.
The data highlight the urgency of Ukraine’s bid to restructure its foreign debt, with a deal needed to unlock the next tranche of international aid to shore up the shrinking economy. The government, which is battling a yearlong pro-Russian insurgency, is eliminating heating subsidies to narrow the budget shortfall under a $17.5 billion rescue loan. The hryvnia is this year’s second worst-performing currency.
“The gas-tariff hike was the main reason for the CPI upsurge,” said Olena Bilan, an economist at investment bank Dragon Capital in Kiev. “Annual inflation has reached or is about to reach its peak. It should subside to less than 40 percent by year-end, helped by a stable currency.”
The hryvnia, which has sunk 25 percent against the dollar this year, weakened 0.5 percent as of 5:39 p.m. in Kiev, the capital, data compiled by Bloomberg showed.
The central bank has said it will only cut its 30 percent benchmark interest rate, the world’s highest, when the hryvnia stabilizes. High borrowing costs are choking the economy. Gross domestic product is extending its 2014 contraction as a year of fighting in the nation’s east heightens an industrial slump.
Inflation will peak in July after increases in utility tariffs, before easing to about 30 percent by year-end, according to the central bank. Policy makers aim to bring consumer-price growth down to 5 percent within five years.
The cost of housing, water, electricity, gas and other fuels jumped 188 percent from a year earlier in April, according to the statistics office. Food and beverage prices rose 154 percent, it said.