The Central Bank’s chairman Sergey Ignatyev still hopes to hit the 8 percent inflation target this year.
Photo: Dmitry Dukhanin
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Inflation in Russia Creeps Back to 2006 Levels
Inflation in July is most likely to repeat June’s rapid growth and come to 1 percent, Russian economists say. Consumer prices rose 0.6 percent in the first half of the month, the Central Bank said Thursday. Experts call for liberalization of agriculture imports doubting that the government will hit the declared year-on-year 8 percent target.
Consumer prices went up 0.6 percent in July, compared to 0.4 percent in July 2006, Central Bank Chairman Sergey Ignatyev said Thursday. Troika Dialog analyst Anton Struchenevsky says inflation in July may come to 1 percent, up to year-on-year 8.8 percent.
Prices jumped 1 percent to 8.5 percent in June, showing a persistent upward trend. Economists said it was triggered by authorities’ spring crackdown on foreign vendors on Russian vegetable markets and restrictions on agricultural imports. Other experts cited the Central Bank’s increase in money supply as a possible reason.
Most analysts agree that growing fruit and vegetable prices are the key factor in inflation’s summer hike. The upward movement followed curbs on some CIS agricultural imports and emergence of other exporters such as Uzbekistan whose produce is more expensive. In summer, import duties on some sorts of fruit and vegetables rose from 5 to 15 percent. Yaroslav Lisovik from Deutsche UFB says that the government should promptly “liberalizes agricultural imports” to keep “vegetable inflation” low.
Economists are sure that the government is on the way to fail to keep inflation within 8 percent at the end of the year. This goal is all the more unattainable due to a shortage of grain on world markets and growing oil prices. The government, meanwhile, is voicing initiatives of administrative regulations over prices. Agriculture Minister Alexey Gordeev said that grain interventions in 2007 and 2008 would be supplemented by export duties. On Thursday, Prime Minister Mikhail Fradkov threatened to freeze oil products prices ahead of an expected price hike in the next two months.
The Central Bank’s chief, Sergey Ignatyev, in his turn, did not give an affirmative answer about the 8 percent target, saying he is “really hoping for this.”
www.kommersant.com
All the Article in Russian as of July 20, 2007
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