Mr. Oleksandr Petryk, Director of General Economic Department, said that consumer prices had remained virtually unchanged in the first quarter of 2013. He explained that weak external demand affecting subdued domestic consumer demand had been the determinant factor in the consumer price dynamics in the first quarter of 2013 and fourth quarter of 2012.

In March 2013, the core inflation grew by 0.4% yoy due to secondary effects arising from a drop in prices for raw foods, as well as a decline in the imported inflation.

“The non-core inflation, which is mainly a reflection of supply-side inflation, remained virtually unchanged in the first quarter of 2013, whereas prices for raw foods being the major component of non-core CPI basket had declined,” said Mr. Oleksandr Petryk.

According to Mr. Oleksandr Petryk, a 0.5% decline in fuel prices in the first quarter of 2013 was triggered by a decrease in oil prices recorded on the world markets in the fourth quarter of 2012.

In the first quarter of 2013, utility tariffs remained virtually unchanged.

Mr. Oleksandr Petryk interpreted the latest producer price index figures, pointing to a 1% increase in the producer price index in the first quarter of 2013. This was to some extent driven by a rise in prices for heating, hot and cold water.

When providing a summary of the results of the business outlook survey in Q1 2013, Mr. Oleksandr Petryk drew attention to the fact that preliminary figures for inflation expectations of managers of Ukrainian enterprises had demonstrated the first positive signs of further economic recovery as they appeared to be much better than in the previous periods.

According to him, increasing confidence in the banking sector fueled by the deposit growth can be considered to be another positive factor contributing to an upturn in investment activities.

“This year inflation is set to remain within the target range determined by the Main Principles of the Monetary Policy for 2013,” said Mr. Oleksandr Petryk.