• Consumer prices grew 9.8% in April as devaluation effect faded
  • Central bank has vowed to trim rates if disinflation persists

Ukraine’s inflation rate dropped below 10 percent for the first time since 2014 as the effect of last year’s plunge in the national currency fades and food costs grow more slowly.

Consumer prices advanced 9.8 percent from year earlier in April after a 20.9 percent increase in March, the State Statistics Office said Friday on its website. That’s more than the 7.3 percent median estimate in a Bloomberg survey of six economists. Prices rose 3.5 percent from the previous month.

Ukraine’s economy is healing from a recession brought on by the conflict in its easternmost regions and a devaluation that wiped a third off the value of the hryvnia last year. The central bank cut its benchmark interest rate for the first time since September last month, and said further reductions will follow if disinflation continues and a $17.5 billion International Monetary Fund bailout is resumed.

The bank is targeting inflation of 12 percent in 2016. While the government is raising utility tariffs to meet the terms of its IMF loan, investment bank Dragon Capital sees the impact on inflation more than offset by continued easing in food costs. It predicts consumer prices will grow 11 percent this year.

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