Friday, December 03, 2004

Price freeze?

The news reported this morning that a price freeze has been put in place. Prices are frozen in place to the price of November 30th.

I don't know who would have imposed it. I don't think the administration is working right now.

Actually, listening to the Rada debates, they just voted to impose a price freeze and economic stability. Don't know what that means.

This has become an issue because one of the heads of a supermarket chain here said suppliers would raise prices by 20%. It is because of this that the government has acted or at least it is an issue for government. But it is hard for me to see why a supplier would increase prices in the face of the stability unless it is a credit issue. Instability of a market wouldn't mean and increase in prices it would seem to me.

But economics is not my strong suit.

UPDATE: I got it wrong. Here's what happened and how it will be implemented:

Verkhovna Rada of Ukraine has adopted resolution "On Measures for Preventing the Further Development of the Financial Crisis and Reduction of Payments Between Companies and State Budget of Ukraine". According to an UNIAN correspondent, 385 deputies of 409, present in the chamber, have voted for this. The resolution commissions the Cabinet of Ministers of Ukraine to introduce amendments into the Ukrainian legislation for imposing a moratorium on the growth of prices in the internal market, with fixing prices at the level of Nov 30. The parliament has commissioned the government to work out a system of control over observing the moratorium.

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