Updated June 18, 2008

The Central Bank (Bank of Russia) first deputy chairman Gennady Melikyan acknowledged it would be impossible to meet even 10,5% inflation this year, and named a more realistic point – 12% (inflation was 11,9% in 2007).

In July the government will revise the inflation forecast, as promises the minister of finance Aleksey Kudrin, but he is cautious. "At the moment I’m not ready to give [new] forecast, but we orient ourselves today to 10,5%".

It is possible to meet 10,5%, as Mr. Kudrin says, and the government would hardly take measures of tough inflation control. "It would be necessary to take additional measures of decreasing money supply growth rates, and that would negatively influence the economy growth".

According to Rosstat data (Federal State Statistics Service), in May, 2008 Russia’s inflation was 1,4% against 0,6%-price rise in May, 2007.

Within June, 10-16 inflation was 0,2%, from the early month – 0,6%, and from the early year – 8,3%. Food products have grown in price the most. Within June, 10-16 rice grew in price by 1,8%. Prices for sausage goods, cookies, noodle, millet and sunflower-seed oil grew by 0,5-0,7%.

Fruit and vegetable products went down in price by 0,2% on the average, but as a result of price drop for cabbage only.