Commodities, Energy, Frontier Markets

Ukraine Hikes Gas Prices By 280% To Secure Extra IMF Financial Aid

Photo courtesy of  EPA/Filip Singer.

Ukraine has agreed to hike the cost of gas to its consumers by 280 percent and by 66 percent for heating, as a part of the terms the IMF had set in order for the nation to receive extra financial aid, Valery Gontareva — the head of the National Bank of Ukraine — said on Wednesday in Kiev.

“From now on, in accordance with our joint program with the IMF, the tariffs will see rather a sharp increase of 280 percent for gas and about 66 percent for heat,” Gontareva said during the 11th Dragon Capital investment conference in Kiev.

Gontareva said that as a result of the hike, inflation will be around 25 to 26 percent by the end of 2015.

The tariff hikes are part of the revisions to the 2015 budget that the government has had to introduce in order to secure an $8.5 billion loan from the IMF by the end of the year.

The revisions will also see Ukraine’s budget deficit growing to 4.1 percent of its gross domestic product (GDP) while the nation’s economic growth (GDP) is seen falling 5.5 percent, according to forecasts.


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