Russian Minister of Finance Alexey Kudrin said the main task of the Central Bank will be to see that growth of the main money mass does not exceed 35 percent. The growth rate of the main money mass was reduced to 33 percent in May, but the effect of that will be felt only with a lag of three or four months.
Photo: Vasily Shaposhnikov
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Inflation Continues Its March
Data published yesterday by Rosstat indicate that inflation in May not only is not stopping, it is picking up the pace. The consumer price index grew 1.2 percent between May 1 and 26, the amount the government had predicted for the entire months just days before. Rosstat is forecasting 1.4-percent inflation for the month, compared to 0.6 percent in May 2007. Inflation for the year is 1.7 times higher than it was at the same time last year. Reorganization of the government has not allowed time to react to price growth.
In spite of Russian President Dmitry Medvedev’s instructions to the government to hold inflation within the limit 10.5 percent annually, economists are pessimistic about its ability to do so. Now the Finance Ministry has been given control over inflation and Finance Minister Alexey Kudrin is heading a special government working group on inflation and has assured the president that the actions of his ministry and the Central Bank will lead to the lowering of inflation within the next half year. He said the main task of the Central Bank will be to see that growth of the main money mass does not exceed 35 percent. The growth rate of the main money mass was reduced to 33 percent in May, but the effect of that will be felt only with a lag of three or four months.
The government seems unable to react promptly to the growth of consumer prices. So far, all of its suggestions have been long term, including antimonopoly measures and changes in tariff policy. Agricultural traders reported rumors this week that the Agriculture Ministry is preparing new export duties on sunflower oil, which was one of the leaders in price rise in May. Kommersant was unable to confirm those plans with any government agency.
www.kommersant.com
All the Article in Russian as of May 29, 2008
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