05 November 2003 09:49
INFLATION FOR YEAR TO EXCEED GOVERNMENT FORECASTS - EXPERTS
MOSCOW. Nov 5 (Interfax) - Inflation in Russia in 2003 will exceed the level of 12% forecast by the government, a
number of economists polled by Interfax said, following the publication of statistics for the first 10 months of the
year by the State Statistics Committee.
There is almost no likelihood of meeting the 12% target. Our forecast is near 13% - somewhere about 12.7%, Dmitry
Belousov, a leading experts with the Center for Macroeconomic Analysis said. He noted that to meet the 12% target,
consumer prices would have to increase 1.1% per month in November and December.
Growth in consumer prices in November-December last year amounted to 1.5% per month. It is difficult to imagine that
growth will amount to 1.1% - it will more than likely be around 1.3%-1.4% per month, Belousov said.
Commenting on inflation information from last month, he noted that October had the most significant growth in
underlying inflation since the start of 2002 which was influenced by a cash surge in the second quarter, when growth in
the money supply amounted to 7% per month.
In addition, he said that the high underlying inflation was also influenced by a slowdown in the turnover of the
money supply in recent months. Growth in underlying inflation may amount to a little over 10% by the end of the year.
Anna Vdovichenko, an expert with the Economic Expert Group, said that the October indicator was than expected - so our
forecast for the year has been slightly reduced. Vdovichenko also noted that monetary factors had an inflationary
influence in October and, as a result, underlying inflation increased significantly due to strong growth in money supply
in the second quarter of the year.
We had forecasts for the year of 12.4%-12.6% and now our forecast is 12%-12.5%, she said, adding that in
November-December 2003 inflation might amount to 1.2%-1.3% per month.
Oksana Osipova, a specialist with the Development Center, said: It will be good if we are under 13% by the end of the
year. To meet the 12% target very complicated mechanisms should come into play - for example, a sharp price freeze at
the end of the year connected with no change in the exchange of the ruble, she noted. She forecast that in November-
December inflation would amount to about 1.3%-1.5% per month and for the entire year at best will amount to 12.4%, but
more than likely will reach 13%.
According to information from the State Statistics Committee, published on Thursday, inflation in October amounted to
1%. Inflation in January-October 2003 amounted to 9.7%, compared with 11.5% in January- October 2002. Underlying
inflation, which rules out short-term irregular price changes influenced by various factors of an administrative, once-
off or seasonal nature, amounted to 101.4% in October (108.9% since the start of the year).
The Russian government forecasts inflation in 2003 of 12%. Inflation in Russia in 2002 amounted to 15.1%.
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