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In Ukraine, more expensive alcoholic drinks and cigarettes

В Украине подорожают алкогольные напитки и сигаретыFood will rise by 7%.

Ukrainians 2017 “will give” the increase in consumer prices for food, petrol, alcohol, cigarettes and travel.

Reporters learned how expensive the goods and why.

FOOD. In January, the cost of food, according to the state Statistics service, has grown by almost 2% compared to December. In this case, while the highest growth was observed in vegetables and fruits, which rose by 14.9%. In addition, the price jumped meat (2-4%) and dairy products (1-2%). According to experts, in General, to the end of the year food and non-alcoholic drinks could rise by 7% in comparison with prices of last year. Economist Alexander Okhrimenko says from about three factors that will be reflected this year on the cost of food. “First, of course, it’s a mess with VAT. Since we do not compensate automatically, entrepreneurs are laying the tax in the price. The second factor is the devaluation of the hryvnia, which we saw in the beginning of the year. It is traditionally scary business, and he immediately lays currency risks in the commodity’s price. Finally, the more expensive diesel fuel, which increased excise taxes”, – said the expert. However, he is skeptical of popular opinion that the growth rate was impacted by an increase in mentorplace to 3200 UAH. Doubts it, and ICPS analyst Alexander acorn, who notes that the growth of the minimal salary will boost inflation, but only 1-2%, because we consider it as a key driver of prices this year is impossible. “As for the rise in price of products in January, it is trivial seasonality. We have traditionally with the beginning of the year to may expensive products, then to September inclusive prices are falling, but in September again experiencing growth. What is important is not only fruits and vegetables, obviously, but the meat and dairy products,” – says acorn.

ALCOHOL AND CIGARETTES. Do not bypass the higher prices of alcohol and tobacco products. So, only in January the price of alcoholic beverages rose 0.7%, on cigarettes — by 2.1%. The reason was the increase in excise duties, which Parliament approved last year. In addition, since March of excise duty on alcohol will increase by another 20%. Head of the Secretariat of the Council of entrepreneurs under the Cabinet of Ministers Andrei Zablovsky believes that the prices of these commodities will rise gradually during the year. Such a scenario would be possible if monthly inflation will not exceed 3-5% in a month, because then the producers in a stable economy will be able to keep pricing. “Due to the increase in excise taxes a pack of cigarettes in the near future may increase by 3-5 UAH. But alcohol can rise, probably somewhere in the 15-20 UAH. Blame not only the excise increase, but the increase in the price of the alcohol,” explains the expert. While Zablovsky says: although now all the conditions for the rising cost of cigarettes and alcohol, but at the same time, there are constraints. “The price policy affects the purchasing power of the population: if the demand will drop, producers will try to restrain prices by the shares, discounts and other things. After all, if prices are very high, the demand may go in the direction of counterfeit or smuggled products. No one is interested because the issue of alcohol and so on 50-60% is in the shade,” says Zablovsky.

FUEL. Finally, the impact of increase in excise duties on gasoline and diesel fuel. Recall that under the new rules per thousand gallons of gasoline will need to pay 213 euros instead of 171, and diesel fuel – is 125,5 139,5 Euro. The Deputy Director of STC “Psyche” Gennady Ryabtsev said that in addition to the price of gasoline affect the cost in Europe and the hryvnia exchange rate: “with regard to oil prices, the high growth should not be. On the contrary, there is a prediction that indicates a decline in prices throughout the year. Because the main factor is the dollar, and it is very difficult to predict even for a year.” In General, experts believe that in 2017 for fuel remains a potential growth to 1 UAH/liter.

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