Inflation in Russia

Euro exchange rate to ruble surpasses record high

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The official dollar rate for Friday has increased by 1.24 rubles up to 47.66 rubles, the rate of euro has increased by 1.72 rubles up to 59.62 rubles – that is a historic record. The dollar-euro basket (0.55 dollars and 0.45 euros) amounted to 53.04 rubles.

On Thursday, the ruble fell to its minimum for the last three weeks as a reaction to OPEC meeting. The reason for the weakening of the ruble is decreasing oil prices. Brent cost fell below $76 per barrel.

Representatives of several OPEC countries – Saudi Arabia, UAE, Kuwait and Qatar – said on Wednesday that they would not propose decreasing the volumes of oil production at the meeting. As Reuters reports, according to some analysts, if the OPEC countries did not agree on the significant reduction of oil production, oil price could fall to $60 per barrel.

According to expert consulting firm IHS Brushan Bahri, it is unlikely that OPEC will agree to reduce oil production significantly, although there is some possibility of surprise too.

www.vedomosti.ru

Russian Retail Sales Slow To 18-Month Low As Inflation Bites

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Russian retail sales grew in July at the weakest pace in 18 months after faster inflation curbed consumer purchasing power, threatening to undercut a mainstay of the country’s economic growth this year.

Receipts at merchants rose 5.1 percent from a year earlier, slowing from June’s 6.9 percent to the weakest pace since January 2011, the Federal Statistics Service in Moscow said in an e-mailed statement today. That missed all 15 estimates in a Bloomberg survey, which forecast 6.2 percent growth.

Russian real wages grew 10.2 percent in July from a year earlier, the service said. That matched the downwardly revised figure for a month earlier and missed economist forecast for 11.2 percent growth. Retail sales from a month earlier advanced 1.6 percent, also missing the median estimate of 2.6 percent.

“The softening in retail sales was to a large extent concentrated in food sales, likely a consequence of rising food inflation,” Vladimir Kolychev, head of research at Societe Generale SA’s OAO Rosbank (ROSB) unit in Moscow, said by e-mail. The expansion in non-food categories was “still robust” at 8.6 percent, he said.

Unemployment remained at 5.4 percent for a third month, the lowest level since at least 1999. Economists had forecast an increase to 5.5 percent, according to the median of 11 estimates in a Bloomberg survey.

“The steady unemployment rate is the only bright spot in the data, generally suggesting that domestic demand is clearly losing steam,” Dmitry Polevoy, chief economist at ING Groep NV in Moscow, said in a note. “With food inflation clearly accelerating, real wage growth easing and retail lending also losing steam, both food and non-food retail sales are set to weaken further in the second half.”

Source: www.bloomberg.com

Price growth of fruits and vegetables in Russia: the prices have never grown so fast

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According to the Federal State Statistics Service, only during 1st and 2nd of July, the inflation rate grew up by 0.5%: the residential rate fee went up by 6.2%, electricity fee – by 4.7%, water and heating fees – by 2.4% and 3.2% respectively. Surface transportation fee went up by 4%. Vodka prices grew by 1.7%, chicken and sugar prices – by 0.7% and 0.5% respectively, according to the report of NEWSru.com with reference to newspaper Vedomosti.

But in June the inflation rate began to rise faster. As the Federal State Statistics Service reported, in June 2012 the price increase rate was 0.9% compared to 0.2% in June 2011. The reason of high rate of the inflation in June was the price growth of fruits and vegetables, as Oleg Zasov, director of the Department of Economic Development, explains. In general, food prices grew by 1.6% in June, but if fruit and vegetables were not taken into consideration, the food inflation was only 0.3%, according to the Federal State Statistics Service.

Prices for vegetables and fruits grew by 13.4% compared to May prices and they went up by 28.8% since the beginning of the year: in June the onion price grew by 39.6%, cabbage price – by 28.6%, potato price – by 24.4%, carrot price – by 21.9%, beet price – by 18.3%.  Lemon price grew by 20.0%, and grapes, pear and orange prices – by  6.3-9.8%.

Andrej Belousov, minister of the Department of Economic Development, called the price rise of fruit and vegetables abnormal. The prices for fruit and vegetables have never grown so fast, and one of the reasons is that the prices for the last year harvest were quite low, meanwhile the stock came to an end in May, and the prices began to rise.

Another reason of the price growth is the drought in Russia’s south regions in May: the harvest of vegetables, especially cabbage, was less than it had been expected before, as Dmitry Rylko, CEO of the Institute of Agricultural Market Studies, told, but he also said that the situation is going to return to its usual state in the nearest future. Dmitry Rylko and Andrej Belousov believe that in July price growth of vegetables and fruit is going to slow down, and then, in August and September, prices may decline.

But while there is no domestic harvest, the import rate is quite high, and it went up because of the depreciation of the ruble, as Evgenij Gavrilenkov, Troika Dialog chief economist, said. According to the Federal State Statistics Service, the general inflation rate grew by 3.8% since the beginning of the year.

Source: www.fruitnews.ru

Inflation in Russia Accelerated to Fastest Pace since October 2009

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The annual inflation rate rose to 9.7% from 9.5% in March and February, according to the median estimate of 12 economists surveyed by Bloomberg. “The main driver continues to be food prices,” said Anton Nikitin, chief economist at Renaissance Capital in Moscow. “Given the gasoline shortage in certain parts of Russia, that component will also spur inflation.” Russians see inflation, the fastest among the so-called BRIC countries, as the country’s biggest challenge facing the country.

Source: www.freshplaza.com

Price Growth and Inflation Rate in Russia in April 2011

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Since the beginning of April inflation has increased by 0.4% (0.3% a year ago). Consumer price growth during the week April 19-25 was 0.1%, same as during the previous five weeks, Rosstat reported. Since the beginning of the year consumer prices have grown by 4.2% (3.5% during the same period in 2010).

Within the last week petrol and diesel fuel prices have grown, but this hasn’t affected consumer price index yet, as prices for fresh produce and some other substantial goods decrease.

Source: www.retail.ru

Inflation in Russia Eats Away the Incomes

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The Russians tend to spend their savings and take loans more actively. Deposit accounts don’t protect savings from the inflation, which is higher than the average interest rate, whereas loans become more lucrative. The real wages in Russia have been falling during the last three months with retail turnover gradually growing. As Rosstat (Russia’s State Statistics Office) reports, in Q1 the food items turnover grew 1.2% and non-food items turnover – 8.3%. The real income has lost 2.9% in Q1 and 3.4% in March. Inflation growth has accelerated and reached 9.5% (versus 7.2% three months ago).

Source: www.retail.ru