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Finance Ministry forecasts Russia's YoY inflation at 7.2-7.3%

April 21, 2014, 21:03 UTC+3 MOSCOW
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MOSCOW, April 21. /ITAR-TASS/. The Finance Ministry forecasts Russia’s year-on-year inflation at 7.2-7.3% in April 2014, and 7.5% peak in May-June, Director of Finance Ministry’s Long-Term Strategic Planning Department Maxim Oreshkin told reporters on Monday.

In his words, the country’s inflation rate may become drastically below six percent. Oreshkin does not rule out that the indicator will meet the official projection of 4.5-5.5%.

Touching upon factors for inflation change, he reaffirmed that the key of them is rather less indexation of tariffs for the population envisioned for the current year (versus preceding years). “This factor alone means a half-percent decline in the inflation rate,” Oreshkin said.

He also pointed to the important role of dairy product, egg and cheese prices in the dynamics of the inflation rate. “In March, the share of these products made up 0.8% in the 6.9% monthly inflation rate. In the period under review, year-on-year milk prices went up by 17.4%, egg prices — by 14.7%, cheese — by 22.4%,” the department chief said.

In his words, the Finance Ministry believes that the aforesaid products prices will hit their high soon. “We see good efficiency of dairy producers. With this in mind, we hope that prices of those products will stop growing in the second half of the year and even can decrease,” Oreshkin said.

The weakening of the Russian ruble exchange rate he considers as another factor of impact on the inflation rate. “The carryover effect [delayed impact of the ruble weakening on the inflation rate] is now rather acute in the prices for import goods,” he said, expressing confidence that the effect should diminish by May-June.

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