In mid-1990 the government introduced a three-stage price reform program, implementation of which was severely hindered by the contraction of the national economy. The purpose of the first stage was to improve agricultural production incentives by raising government procurement prices for staple products. The second stage raised wholesale prices and tariffs to bring them closer to world market levels and to stimulate price negotiations. The third stage fixed prices (usually at increases of 300 to 500 percent) for food, medicine, utilities, and transportation, but it freed the prices of most other items. Experts believed that prices would not reach true equilibrium until the end of shortages caused by the blockade.
Between December 1992 and September 1993, annual price increases for various goods and services ranged from nearly 600 to over 1,200 percent. Whereas the average monthly increase for all expenditures in 1993 was 23 percent, the rate fell considerably in the second half of the year. By the summer of 1993, monthly increases had fallen below 17 percent.
Data as of March 1994