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Inflation in Russia could hit 11.5% in 2007

Inflation in Russia could reach 11-11.5% by the end of this year, the economics ministry said on Tuesday.

In an overview of the country’s socioeconomic development, the ministry said that in October consumer price growth totaled 1.6%, twice September’s figure (0.8%), and that since the start of the year inflation has aggregated 9.3%, compared to 7.5% in the same period of last year. The government’s inflation target for this year was 8%. A recent report by the World Bank said that continued inflationary pressure and the strengthening of ruble against the US dollar and other world currencies are proving to be major fiscal problems for Russia.

The World Bank said that owing to the limited number of instruments for withdrawing excess monetary resources from the economy and the current policy of restricting the ruble’s nominal appreciation, it is becoming increasingly difficult for Russian fiscal authorities to rein in inflation. (