"Ukraine’s inflation rate topped 26% in March, propelled by surging food prices and the government’s largesse. Although high food and energy price inflation are global phenomena, Ukraine’s situation is being made worse by budgetary policy. Moreover, the political climate reduces the likelihood of policy changes to meet the inflation challenge. ... Although the government tends to stress that high inflation is the unavoidable outcome of high food and energy prices globally, the authorities are doing their best to delay the impact of import-price inflation. Utility tariffs, for instance, are rising at a high single-digit rate this year. If the full cost of the gas-price hike instituted this year had been passed on, utility price inflation would be well into double digits. Instead, municipal budgets have borne much of the burden--this is a situation that cannot continue indefinitely, particularly as further import price rises are inevitable in 2009. If consumer prices fully reflected the cost of imported energy, inflation would be running even higher. ... As a result, there is no chance of meeting the official inflation target; most likely, price growth will be at or close to double that level." (The Economist)