War-Torn Ukraine Sees Highest Inflation In 14 Years
KIEV, Jan 6 (Reuters) -- Sharp rises in the domestic price of gas and the devaluation of the hryvnia currency, pushed up inflation in Ukraine to almost 25 percent last year, its highest level in 14 years.
Official statistics published on Tuesday reflected the year of turmoil in the country of 45 million in which street protests ousted a Moscow-backed president, prompting Russia to annex Crimea and support a separatist rebellion in which more than 4,700 people have been killed.
The numbers also reflect the reform policies of the pro-Western government of Prime Minister Arseny Yatseniuk who is seeking to uncouple the economy from its subsidised Soviet past and make it fit for competition in the European mainstream.
The State Statistic Service said consumer price inflation soared to 24.9 percent from 0.5 percent in 2013 -- close to the 25.8 percent recorded in 2000 when Ukraine had to absorb the effect of a global crisis.
With the war in the east hitting major exports such as steel and forcing for the first time imports of coal and electricity, a major factor driving up inflation was the government's decision to raise the price of gas in homes across the country, largely at the behest of the International Monetary Fund.
The IMF, on which Ukraine relies for a steady stream of credit under a $17 billion bail-out programme, has long been pressing for an end to state subsidies to the state-run energy behemoth Naftogaz which it sees as running counter to the economy's long term benefit.
But the devaluation in the hryvnia, which lost half of its value in 2014, also helped push up the price of food, fuel and services.