Inflation Acceleration in Russia

We’d like to remind, that within the previous three months, prices for consumer goods and services in the RF have not increased. Therefore, in November, acceleration in inflation was not accelerated due to the termination of seasonal factors associated with the reduction in the cost of fruits and vegetables, and with some growth of economic activity in recent months.

In the nearest future additional upward pressure on consumer prices will be provided by a significant increase of monetary supply due to the growth of budget expenditures at the end of the year, as well as raising utilities rates in January 2010. However, consumer demand in the RF is still at a rather low level, which is going to keep prices down. As a result, in our opinion, the CPI will be about 9% as a result of 2009.

P.V. Trunin – PhD, Head of Laboratory for Monetary and Credit Policy