Taken for the poorest Russians, the 2008 inflation will be notably above the official outlook of 10.5 percent, climbing to the height of 25 percent.
Photo: Oleg Xarseev
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Inflation to Exceed 25% for the Poorest
Taken for the poorest Russians, the 2008 inflation will be notably above the official outlook of 10.5 percent, climbing to the height of 25 percent, RIA Novosti reported with reference to analysts of FBK Audit & Consulting Company. This surge will widen ranks of the poor, the analysts concluded.
FBK hasn’t revised its general inflation forecast for this year, predicting the growth of at least 14 percent. As to the poorest, the analysts used data on movement in prices for the minimal food basket. “Given that the cost of the minimal food basket accounts for 45 percent to 50 percent of the total cost of minimal consumer basket, which is the value manifestation of the minimum living wage, the dominant effect of the food price movement for assessing inflation for the poor should be acknowledged,” said Igor Nikolaev, chief of strategic analysis department at FBK.
The cost of minimal food basket grew 20.6 percent in the first half-year. “Food prices that are the base of the diet for the poor are accelerating most of all,” Nikolayev pointed out.
The prices for fruit/vegetable stepped up 36.0 percent from January through June, spaghetti soared 26.0 percent, oil increased 25.9 percent, bread and bakery products grew 20.7 percent. In view of this trend, the cost of minimal food basket may go up by no less than 30 percent in 2008.
The possible aftereffect of this surge could be the general growth in number of people with the income that is below the minimal wage. The ranks of the poor may widen to 20.0 million in 2008 from 18.9 million in 2007. “The growth in absolute number of the poor will be recorded in Russia first time in 2000s,” Nikolaev specified.
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