Ukraine's central bank dramatically raised its forecast for 2004 inflation on Friday in a strong sign of economic deterioration sparked by weeks-long political turmoil. Ukraine's economy - one of Europe's fastest-growing - has been rocked by a crisis triggered by a flawed November 21 presidential election that filled streets with flag-waving protesters and cast doubt over official growth targets.
Anatoly Halchynsky, head of the Central Bank's council, told a bank meeting he saw this year's inflation at 12.0 percent, up from a previous forecast of 9.5 percent - but added the economy was beginning to recover.
"Negative trends that have taken place in the past two months did not have any substantial economic grounds. What happened is linked to political factors," he said. "We can see negative trends have weakened and stabilisation is returning to the money and forex markets."
Next year's inflation was likely to be 8.5-9.5 percent compared with the bank's previous estimate of 6-7 percent.
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