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Govt to Overwhelm Inflation for Future Use
The very favorable inflation registered in Russia early this year prompted some ministers to speculate about trimming the inflation target. Yesterday, the government’s budget projecting commission urged Economic Development Ministry to elaborate one more scenario for economy’s development in 2008 to 2010 that would provide for reducing the target inflation by another 0.5 percent towards the annual inflation of 6 percent to 6.5 percent.
The budget projecting commission of the government focused yesterday on the moderate optimistic and sluggish forecasts for economy’s advance shaped by the Economic Development Ministry for 2008 to 2010. Both scenarios are based on the average Urals prices of $55 in 2007 and $50 in 2010. Under the moderate optimistic outlook, Russia’s GDP is forecasted to step up 5.9 percent to 6.1 percent in 2008 to 2010, while the inflation is expected to shed from 7 percent to 6.5 percent respectively.
All forecasting certitude of the Economic Development Ministry notwithstanding, it didn’t escape the commission’s order to elaborate another document that would trim the forecasted inflation to between 6.5 percent and 6 percent for 2008 to 2010.
But neither the Economic Development Ministry nor the Central Bank of Russia looked particularly agitated by the task. The reason of such harmony became clear during the yesterday’s meeting of President Vladimir Putin and Economic Development Minister German Gref. As of February 19, the minister said, the prices grew just 0.5 percent vs. 0.7 percent a year earlier. The first two months of 2007 allow speaking about the 1.5-percnet inflation won back from the indicators posted in the first two months of 2006, Gref specified.
www.kommersant.com
All the Article in Russian as of Feb. 27, 2007
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