Ukraine’s economy grew 4.9% in January year-on-year, compared with 6.9% in November. December’s figures have not been published. “This is a fairly high rate for such an ambitious budget,” Central bank chairman Volodymyr Stelmakh told an investors’ conference organized by investment bank Renaissance Capital. He was referring to plans in the 2008 budget, approved by parliament, for increases in public sector wages and benefits. “If the issues about which the president has spoken of are solved, including VAT tax refunds, then growth will be higher (than in January),” he said. President Viktor Yushchenko has promised the refunds will be paid soon.
Inflation jumped to 2.9% in January, compared with 2.1% in December, pushing annual price rises at the beginning of the year to almost 20%. But veteran economic reformer and now Finance Minister Viktor Pynzenyk stuck to the government’s target. He said senior officials in the government, again headed by Prime Minister Yulia Tymoshenko as it was in 2005, had experience in fighting inflation. “We have the will, the wish and the understanding to do this,” he said. He also said the budget would be in the black in the first two months of this year, helping inflation to slow already in February. The government’s budget sees a deficit for this year at 2.0% of GDP. (Reuters)
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