Tymoshenko: Ukrainian Inflation Hit Seven-Year Record

KIEV, Ukraine -- Inflation in the former Soviet republic Ukraine has hit a seven-year high, Prime Minister Yulia Tymoshenko said at a Friday cabinet meeting.

Prime Minister Yulia Tymoshenko blames the previous government for cost increases.
Strong GDP growth combined with record fuel prices and a weakening dollar made for average price rises of 17 per cent in 2007 she said, according to a Channel 5 television report.

Tymoshenko, elected prime minister by a narrow parliamentary majority late last month, blamed the previous government for cost increases, which were seen across the board but particularly at the retail level.

The government needs "to take immediate measures" to halt skyrocketing retail costs to protect consumers, and to fight inflation using all conventional means, Tymoshenko said.

"We will use only (economic) techniques within the guidelines of the World Trade Organization (WTO)," she said.

A populist politician elected on a commitment to eradicate corruption from Ukrainian government, Tymoshenko during term as Prime Minister in 2005 attempted to freeze meat and petrol prices as a vote-getting measure.

International finance organizations critcised her for attempting to manipulate the country's economy, a charge that helped prevent Ukraine's entrance into the WTO despite years of trying.

Ukraine saw hyperinflation exceeding 1,400 per cent during the first half of the 1990s, by many standards the worst inflation in history.

The National Bank of Ukraine in recent years has conducted a tight fiscal policy, tying the national currency to the dollar.

Inflation fell to 23 per cent in 2000, and stabilised at 10 per cent or below since then.

Source: DPA