OREANDA-NEWS. According to experts of Millennium Capital, a financial services provider, in September 2007, the growth of Ukraine's producer prices (measured by PPI) decreased slightly comparing to the previous month (1.1%, m/m vs. 1.7%, m/m in August). The cumulative PPI-inflation for 9M2007 stood at 15.8% (14.5% in 8M2007). Most of the increase in prices was seen in the mining industry (1.5%, m/m), manufacturing (1.8%, m/m), whereas prices of utilities production decreased by 2.2%, m/m. The growth of manufacturing prices had an increasing tendency in 9M2007 with the average rate of 1.5%, m/m. At the same time, the growth of utilities prices slowed down from 9.7%, m/m in January 2007 to -2.2%, m/m in September 2007.

Given the manufacturing took 76.2% of all the industrial output in 2006, its growth trend will become a crucial factor in the rise of PPI in 2007, the analysts believe. The growth of producer prices in 2006-2007 also had a positive effect on economy - it was one of the main stimuli for industrial boom, especially in metallurgy, stimulating export growth. On the other hand, producer prices rapid growth gets gradually translated into higher consumer prices growth causing higher than usual inflation level, and future NBU's policy on money supply and exchange rate regime would be crucial here. "So far, we maintain our forecast for PPI at 18.5% for 2007 and about 1.4% for October 2007," the experts conclude.