Russian Producer Prices February 2008

Internal inflation in Russia continues to spiral dangerously upwards, with the cost of goods leaving Russian factories and mines rising at the fastest rate in more than three years in February as global energy and commodity prices remained high, and internal wage pressures continued to push up costs.

Russian producer prices increased by 26.4 percent year on year in February, the fastest annual rate since December 2004, and up from 25.2 percent in January, according to data from the Federal Statistics Service today. Prices rose by 0.6 over January.




Capital investment increased an annual 21.2 percent in February:



and industrial output expanded 7.5 percent.



Meantime Russia has raised its official 2008 inflation forecast to 8.0-9.5 percent, up from the previous 7.5-8.5 percent, according to the Economy Ministry's chief macroeconomic planner, Gennady Kuranov, at a news conference today.

Kuranov said the Ministry also raised its 2008 economic growth forecast to 7.1 percent from 6.6 percent. The forecast serves as a basis for calculations of the budget, which will be discussed by the cabinet's budget committee at the end of March.He added that capital inflows for 2008 were expected to decrease to $30-40 billion from last year's record of $82.3 billion