Inflation is a process of depreciating money in which, over time, less and less goods and services can be purchased for the same amount. Almost always, this process is perceived painfully and negatively. In most cases, inflation is characterized by rising prices for food, medicine, goods, services, real estate. In other cases, its main manifestation is a decrease in the quality of products and services or the appearance of a deficit.
In Ukraine, the problem of rising prices for consumer goods and services is very acute. The inflation index in Ukraine is higher than in Russia.
What is happening with the Ukrainian economy?
Ukraine’s economy is going through hard times. The redistribution of property, the outflow of capital, the general chaos in the country and the deterioration of economic ties with Russia have become a real test for the population. The actual separation from the rest of the Donbass region reduced production opportunities, while the separation of Crimea reduced the total tourism potential. The country is sorely lacking in fuel resources, the extraction of which was carried out mainly in the Donbass. Now Ukraine is trying to develop renewable energy, increasing cooperation with other countries, but it will take time for the economic return from it.
One of the main revenue items was agricultural production, which is very sensitive to weather conditions, which makes the Ukrainian economy unreliable and risky. In addition, she is now increasingly dependent on external factors.
The situation in the economy and standard of living of Ukrainians deteriorated sharply in 2014-2016, and then stabilized at a low level, which affected the magnitude of inflation. But high crop failure risks can negate this dynamic. It is easy to see that the period of economic failure in Ukraine and Russia, as well as the period of its stabilization, coincide in time. But the causes of the crisis of the two countries are completely different.
The situation with prices in Ukraine
Information on inflation in Ukraine is provided by the State Statistics Service (Derzhkomstat). To determine its value, data were used on the prices of goods and services consumed.
Price tags in Ukraine are growing in the same way as in Russia. So, in the early 90s, there was hyperinflation in the country. A particularly large jump in prices occurred in 1993, when they rose immediately by 10,155%. Quite quickly, inflation slowed, and in 1997 it amounted to only 10%. Then its level grew slightly and reached a maximum in 2000 (25.8%).
Further, until 2014, price increases were from almost zero to average. The maximum was observed in 2008 (22.3%), and the minimum - in 2002 (-0.57%). In recent years, inflation has risen, peaking in 2015 (43.3%). In 2016 and 2017, the inflation rate was about 13%, and over the past 12 months - 8%. This indicates a decrease in its pace.
In July 2018, prices increased by 0.7%. Thus, inflation in Ukraine, as well as in Russia, began to slow down. As for the comparison of specific figures, the Rosstat data give lower values of inflation in Russia than the presented data for Ukraine. However, all this does not take into account hidden inflation, therefore only specialists who are professional and familiar with the situation in both countries can correctly compare its total value.
Total and average inflation in Ukraine
Between 1992 and 2018, total inflation amounted to 58 140 545, 6%. The average annual inflation rate in Ukraine over the past 10 years amounted to 13.42%.
Conclusion
Inflation in Ukraine is quite high and is a serious problem for the population. The country's economy in recent years has become more vulnerable and dependent on external factors, which creates the risk of a sharp rise in prices in subsequent years. Since 2016, prices in Ukraine have stabilized slightly, while in Russia inflation is now significantly lower.