CBR chief Sergey Ignatyev and Finance Minister Alexey Kudrin will have to deal with inflation without sacrificing the economic growth.
Photo: Dmitry Dukhanin
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The Inflation Sub-Component
July inflation hit 0.7 percent in Russia, worse even than the most pessimistic expectations. The bureaucrats no longer mention the 8.5-percent inflation planned for this year, giving up 9 percent instead. But analysts doubt even that figure. Their outlook is the 10-percent inflation in 2006 and the ruble appreciation of 26.2 to the U.S. dollar.
In Russia, last year’s scenario with the cabinet revising the inflation outlook from time to time apparently plays again. Similar to 2005, inflation may transform into a political problem by this fall.
Consumer price index (CPI) grew 0.7 percent in July, having gained 6.9 percent from early this year, Russian Statistics Committee announced yesterday. So, the annual inflation (July to July) was 9.3 percent, which doesn’t match even the forecasted 9 percent.
Indeed, the surge in prices posted early this year was followed by a certain slowdown. As May (0.5 percent) and June (0.3 percent) inflation inspired optimism, Alexey Ulyukaev, first deputy chairman at Central Bank of Russia (CBR), hoped for the zero inflation in the third quarter, which will allow to close the year in line with the annual target of 8.5 percent.
Ulyukaev’s hopes didn’t materialize though. At least, Andrey Klepatch, who is in charge of the macroeconomic forecasting department at Economic Development Ministry, spoke yesterday about the annual inflation of 9 percent already.
www.kommersant.com
All the Article in Russian as of Aug. 08, 2006
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