The consumer price index gradually decreases. According to the deputy director of the General Economic Department of the National Bank of Ukraine Oleksandr Petryk, July inflation made up 0.2%. At the same time, decline in inflation on an annualized basis stops and now the figure is almost zero.

"The main factor of decline in July inflation on an annualized basis was the low base in comparison with the last year. Due to the rich crop 2011, agricultural products turned out to be cheaper. As a result - July 2011 inflation rate was 1.3%," he said.

Core inflation on an annualized basis was dropping for eleven consecutive months. In July it made up 3.1%. According to Petryk, it was caused by two factors: the deliberate monetary policy of the NBU aimed at reducing the overall long-term inflation trend and the influence of secondary effects caused by cheapening of raw foods in 2011 and the first half of this year.

The deputy director of the General Economic Department of the NBU noted that the price for the administratively regulated services grew moderately. In July, they rose by 0.4% and practically had no effect on the overall inflationary background. "But fuel prices decreased by 1.4% due to the decline in oil price in world markets," he said.

Inflation expectations keep falling. In July, they were record low.
According to the report, a relatively stable exchange rate of hryvnia and low inflation in the main trading partners of Ukraine led to a slight increase (0.4% on an annualized basis) in prices for imported goods in total consumption basket of Ukraine.

In July, producers’ prices fell significantly - by 2.9%. As a consequence - the producers’ price inflation on an annualized basis slowed to 1.4% in July from 4.5% in June. "The reason is decline in prices for major commodity groups in the world trading floors," the banker said.

"Now the inflation environment in the economy is close to an optimal one. This means that on the one hand inflation will not slow economic growth, on the other - does not cause excessive inflation expectations. And this situation can be a very good basis for the continuation of structural reforms and for ensuring sustainable economic growth of Ukraine in the coming years," Petryk summed up.

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