Russian Inflation October 2007

From Bloomberg this morning:


Russia's inflation rate rose to 10.8 percent in October, the highest level since February last year, as oil and food prices advanced.

The rate increased from 9.4 percent in September, the Moscow-based Federal Statistics Service said in an e-mailed statement today. The result exceeded a median estimate of 10.6 percent by 21 economists in a Bloomberg survey. Prices rose a monthly 1.6 percent in October.

Russia, the world's biggest energy exporter, has struggled to slow inflation to western European levels as money from oil and gas sales flood the country and global food prices increase. The government registered single-digit annual price growth of 9 percent for the first time last year.

``Very high monetary expansion,'' due to increased oil prices and foreign investment, have pushed up inflation, Vladimir Osakovsky, an economist at Moscow-based Aton Capital, said before today's report. ``External shocks,'' in the form of rising global food prices, also played a role, he said.

The inflation rate won't drop ``significantly'' in the next one or two months because of increasing wages and rising global food prices, central bank Deputy Chairman Konstantin Korishchenko said on Nov. 15.

In a bid to rein in prices, the government has approved lower import duties on dairy and vegetable oil, sold some grain from the state reserves and instituted an export duty on grain to keep the commodity in Russia.

Food prices account for more than a third of the Russian consumer-price index, the UralSib Financial Corp. investment bank said. Most Russians spend more than half their household income on food, according to the state-run Center for the Study of Public Opinion.

also this today from Bloomberg:

Russian consumer prices may grow between an annual 11 percent and 11.5 percent in 2007, the Economy Ministry said.

Inflation in November could fall to between 0.8 percent and 1 percent, the ministry said in a report released today. Prices jumped a monthly 1.6 percent in October, the most since January, as food prices advanced, according to the Federal Statistics Service.

Russia, the world's biggest energy exporter, has struggled to lower inflation as revenue from oil and gas sales flood the country and global food costs rise. The government sought to slow inflation to 8 percent this year from 9 percent in 2006.