Consumer Price Index in March

Like in February 2009, it was the price rise for food stuffs whose contribution to the March price rise was the greatest one (+ 1.7%), with the most intensive price rise noted with respect to fish and seafood (+ 3.3%), granulated sugar (+ 8.5%) and fruits and vegetables (+ 4.9%). Meanwhile the prices for eggs were down at 5%, while vegetable oil – at 3.1%.

Prices for non-food goods were also on the rise at an average nationwide rate of 1.6%. Of all the goods prices were growing at a fastest rate for medicines (+ 5.3%), cleaning and washing substances (+ 3.1%) and tobacco (+ 3%), while gas was down at 2.5% over the period in question.

Finally, paid services for the population have grown more costly, too, with the respective price rise rate accounting for 1.4%. Atop the list are prices for communication services (+ 2.4%), those provided by organizations of culture (+ 1.4%), and medical services (+ 1.4%). The prices for the overseas tourist services
tumbled at 0.4%, while those on educational services – at 0.1%.

So, by results of the month, inflation rate in Russia has decelerated, but remained higher than in the respective period of 2008. A high inflation is fueled primarily by a considerable depreciation of the Rb. exchange rate. The extension of the budget deficit may also form a factor of a significant inflation in the second half-year.

Meanwhile, a fall in the rate of money supply and compression of the aggregate demand in the economy due to the crisis should contribute to deceleration of inflation in the summer and autumn. We would estimate the final value of the 2009 CPI in RF being greater than last year and accounting for 15-18%.

P. Trounin, Head, Department of Monetary and Credit Policy