Develop and promulgate

Medium-term development of realistic plans based on the inflation forecast of full-scale economic development of Ukraine On this basis, it is necessary to develop and promulgate a realistic medium-term plans for the development of inflation forecast based on the full-scale economic development of Ukraine for 2008-2012, including indicators inflyatsii i, System of National Accounts , budget, monetary indicators, indicators of external sector. Lack of cooperation between the Government and the National Bank on the establishment of inflation targets, allocation of responsibility for achieving them reduces the effectiveness of monetary and economic (fiscal) policy, undermines public confidence in the government reduces the predictability of the macroeconomic environment, leads to higher inflationary expectations, further increase in inflation, and, consequently, decrease welfare. Draft State Budget of Ukraine for 2009 is based on unrealistic forecasts of macroeconomic indicators, including GDP growth significantly overestimated (0.4%) and significantly low inflation (9.5% December to December). Since most experts predicted a fall in GDP at 3-5% (the most pessimistic estimates - 8-10%) and inflation rate of 15-20% (inflation expectations of business in 2009 is 18.6%). According to the forecasts as the international economic institutions (IMF, World Bank), as well as specialists of the National Bank, the real economy crisis will last for at least the first half of 2009. During this period, it is unlikely recovery of both domestic and external demand, will also significantly reduce investments, determining economic growth in future periods as a consequence of projected decline in GDP of around 3-8%. But the foundation of the State Budget of Ukraine put an optimistic and unlikely scenario that is a threat to the implementation of the budget. Growth rate of consumer inflation (9.5%) is too low. Since a significant devaluation of the hryvnia and the next price increase for imported gas will lead to a significant increase in administrative regulated tariffs. Also, due to the devaluation and the expected introduction of a temporary surcharge on import duty will raise prices of imported goods, which will create substantial pressure on core inflation. Simultaneously, the contribution of food products that have not undergone an industrial process, is 2 percentage points Thus, we estimate that the increase in consumer inflation will be at least 15%. Topic: Banking System