8 Sep 2010 16:18

Russian inflation accelerates to 0.2% again in week

MOSCOW. Sept 8 (Interfax) - Russian inflation accelerated again to 0.2% in the first week of September, driven by unseasonal growth for fruit and vegetable prices and soaring eggs and buckwheat prices, and the Federal State Statistics Service (Rosstat) said.

Prices had jumped 0.2% for the first three weeks of August before the growth slowed back to the 0.1% seen for most of the spring and summer period in the last week of August.

Fruit and vegetables, which usually fall in price in August-September and which indeed fell by 0.3% in the week August 24-30, went up 0.2% in the week August 31-September 6 due to a 1.8% price surge for potatoes.

Eggs rose 13.7% compared with 8.3% the previous week, and buckwheat rose 8.7% (5.1%).

There were also price rises of 1.5% for sunflower oil (0.9% the previous week), 1.4% for granulated sugar (2.1%), 1.2% for milk (1.0%), 1.2% for butter (0.9%) and 1.1% for wheat flour (1.6%). Rye bread rose 0.8% (0.3%) and wheat bread went up 0.5% (0.3%) in price.

Gasoline prices rose 0.1% in the first week of September, but diesel was unchanged.

Inflation was 5.6% for the period January 1-September 6, 2010, compared with 8.1% in the same period of last year. Inflation was zero in the first week of and in September 2009 as a whole. Inflation in annual terms as of September 6, 2010 was 6.3%, up from 6.1% at the end of August and 5.5% at the end of July 2010.

Analysts told Interfax in a consensus forecast at the end of August that they thought inflation for the year would be 7.7%. The drought has already affected food prices, but it will be hard to gauge how much and for how long until the harvest has been completed. Other factors that could fuel inflation in H2 2010 include the low comparative base with last year and higher personal incomes and monetary base.

The Russian Economic Development Ministry has already raised its 2010 inflation forecast to 7%-8% from 6%-7%, and its 2011 forecast to 6%-7% from 5.5%-6.5%.

The Central Bank thinks weekly inflation will be higher in September than in the same month last year at just under 0.2%; and just over 7% for 2010 as a whole, compared with 8.8% in 2009, CB First Deputy Chairman Alexei Ulyukayev said last week.