OREANDA-NEWS. December 10, 2008. Price-cutting continues the third month running. In September it totaled 1,8, in October – 1,4%. In total during the last three months price fall in the industry almost achieved 10%.

“This is a very important signal of right economic response to the crisis,” Finance Minister of Ukraine Viktor Pynzenyk commented upon these data. I am not concerned about the consumer price changes (inflation) – 1,5%. Firstly, it is less as against the previous month (1,7%) and essentially lower as compared with the November rate of the last year (2,2%), Secondly, consumer prices did not change (+0,2% against + 2,3% in November of the previous year). Thirdly, rise in prices occurred at the cost of those sectors (communal services) which had a production price essentially higher than the price”.

Both in the world and in Ukraine the present crisis of real economy, which has started from the banking sector, based on the consumption crisis. Reduction in industry prices helps to maintain production volume.

Under the current conditions, if we avoid mistakes, the country faces no risks of high inflation. At the same time the response of consumed prices is not enough, Viktor Pynzenyk thinks. According to him, more essential response both in the sector of final consumption and in production sectors is required. “These steps are not enough to reduce the negative consequences of the consumption crisis. And I expect deeper response of the economy in December this year”.
“Such response which is made in all sectors of the economy simultaneously, reduces expenses in all branches, retains real consumption expenditures at the best positions (due to the right price dynamics) and supports the economy to maintain production volumes or slacken its drop speed,” the Minister noted.