Inflation in Russia might be 0.9%-1.1% in March, annual inflation not to exceed 16.8%-16.9% - MinFin
MOSCOW. March 27 (Interfax) - Inflation in Russia might be 0.9%-1.1% in March versus 1% in the same month of last year, the head of long-term strategic planning at the Finance Ministry, Maxim Oreshkin, told reporters.
"As concerns inflation, the Finance Ministry remains the most optimistic of all the ministries. We are now seeing that inflation is slowing abruptly based on March's dynamic. We now have an average daily rise in prices lower than what it was in March 2014," he said.
According to the Federal State Statistics Service (Rosstat), average daily inflation for the first 23 days of March was 0.032%, which was lower than the 0.033% in March 2014. In February 2015, the average daily increase in prices was 150% higher at 0.078%.
If consumer prices in March go up by about 1%, "this will mean that for the first time in many months inflation in annual terms might not increase compared to the February level," Oreshkin said.
"In terms of the future dynamic of inflation, it seems to us that it's important to draw attention first of all to the dynamic of nominal wages. For February, growth amounted to 5.2%, which indicates that there is no pressure on inflation from the demand side," Oreshkin said.
He said one-off factors such as the depreciation of the ruble and trade restrictions, which the Finance Ministry estimates contributed more than 11 percentage points to the current inflation rate of 16.7%, have already played themselves out.
"Going forward, there are no factors for a trend toward price growth and we expect a very dramatic slowdown of inflation. When we say that we expect about 11% inflation for the year (December to December), one should understand that 8.1% of these 11% will already take place in the first three months. Subsequently, the only factor that will have an impact on price growth will be the increase in tariffs as of July 1 this year," Oreshkin said.
"On the whole, we believe that the decisions that are being made within the context of the budget to limit indexation of wages are exerting very substantial anti-inflationary pressure. It will start to manifest itself and support this trend toward a rapid slowdown of inflationary dynamics," Oreshkin said.
Annual inflation, after surging at the end of last year and beginning of this year, stopped climbing at the end of February and has remained unchanged at 16.7% in the past four weeks. Oreshkin believes this figure is close to the peak and could increase to 16.8-16.9% at most.
"But in any case, we are at this peak. We'll begin to steadily descend, go up a little when tariffs are raised in July, and after July we are heading for a very rapid road down," Oreshkin said.