Russia’s inflation to hit 12% in 2008

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Inflation in Russia may reach 12% this year, some one percentage point higher than the previous official forecast, a Russian Central Bank official said Tuesday.

“I don’t think we’ll achieve the 10-10.5% target in 2008. I don’t think we’ll see single-figure inflation this year. The forecast might be level with last year,” Interfax news agency quoted Central Bank First Deputy Chairman Gennady Melikian as saying.

The Russian government had expected to hold inflation at 10.5% this year, but the increasing oil and food prices worldwide have impacted the soaring economy. Inflation in Russia increased by 8.1% in the first half of this year, Federal State Statistics Service figures show.

The government will review its inflation forecast for 2008 in July, Vice Prime Minister and Finance Minister Alexei Kudrin had said last weekend. The chief economist for Russia at the World Bank’s Moscow office, Zeljko Bogetic, has predicted that the country’s inflation may reach 12 to 14% this year, with an increase of 7.5-8% in gross domestic product.

Moscow has pledged to use customs and tariff policies, as well as fiscal and monetary measures, to cope with the inflation. “The proposed measures should ensure an optimum balance between domestic production and sufficient import, and between manufacturers and consumers,” First Vice Prime Minister Viktor Zubkov said at a meeting on protective measures in foreign trade, and customs and tariff policy. (people.com.cn)

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