3 Nov 2010 17:08

Inflation slows to 0.5% in October; 7.5% on annual basis - Rosstat

MOSCOW. Nov 3 (Interfax) - Russia had 0.5% inflation in October following inflation of 0.8% in September, 0.6% in August, 0.4% each in July and June and 0.5% in May, Rosstat reported.

Inflation through the first 10 months of the year was 6.8%. Inflation in the same period last year was 8.1%, including zero inflation in October.

On an annualized basis, inflation was 7.5% in October, compared with 7.0% in September, 6.1% in August, 5.5% in July, 5.8% in June and 6.0% in May and in April.

October inflation was lower than expected. Analysts told Interfax in a consensus forecast that October inflation would equal 0.6%.

The base consumer price index, which excludes seasonal and other effects, amounted to 100.8% in October 2010, compared with 105.1% at the beginning of the year (100.3% in October 2009 and 107.6% in the year to date).

The poor harvest caused fruit and vegetable prices to decline just 1.8% in October (compared with a decline of 6.1% in the same month last year), which was not enough to offset price rises on other food products.

Food prices rose 0.7% in October (compared with an increase of 1.6% in September), including 1.0% for food products other than fruit and vegetables (1.8%).

Prices on non-food goods were up 0.6% in October, the same as in September.

Rates on services were unchanged, as was the case in September.

The cost for the minimal grocery basket of goods rose to 2,465 rubles in October, 0.9% higher than in September and 15.2% higher than at the beginning of the year.

The consensus forecast compiled by Interfax at the end of October calls for 8.3% inflation in the full year. Alongside the effects of the drought, inflation will be driven by the low comparison basis last year, rising household incomes and the expanding monetary base.

In August the Economic Development Ministry raised its inflation forecast to 7%-8% from 6%-7% in 2010 and to 6%-7% from 5.5%-6.5% in 2011.