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30.12.2005 | Viktor Lisitskiy, State secretary of the Cabinet of Ministers of Ukraine in 1999-2001

Sometimes it is a pleasure to acknowledge ones own mistakes

   

Sometimes it is a pleasure to acknowledge ones own mistakes.

The mistake related to customer price inflation in 2005. The State committee of statistics has informed that in November these prices increased by1.2%, and during January-November 2005 – by 9.4% in comparison with December 2004.

Now December has begun, the month, in which prices rise most rapidly. And, unfortunately, the annual inflation will, most probably, exceed 10%, contrary to the demand of Viktor Yushchenko to the National Bank. I expect that inflation will be about 11%.

This figure should be must smaller, since the commercial crediting of the large-scale investment projects, which are urgently necessary for the development of Ukraine, assumes the amounts considerable for economy only if the inflation of customer’s prices does not exceed 3-5% per year.

However, only two-three months ago, when Yulia Timoshenko was the Prime Minister, both the author of this article and many other experts predicted much greater rate of inflation. I, in particular, believed that in the current year the increase of customer’s prices would be more than 15%. The vehement social demagogy of these months, plus the declarations about privatization (contrary to logic and Viktor Yushchenko’s position), plus the authoritarian style of direction of the government, formed just such opinion on the nearest price future of Ukraine.

Another factor. The replacement of the Prime Minister-populist (Yulia Timoshenko) with the Prime Minister-pragmatic (Yuri Yekhanurov) saved the Ukrainian government from the attacks of childish hysteria, which, naturally, helped all subjects of the market to get rid of the economic fever and uncertainty. So, we observe a noticeable improvement. And not only in the sphere of prices.

It is worth noting that the economy has practically stopped its fall, and now we can expect for the stable economic increase. Thank goodness!!

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