The World Bank has increased Russia's 2010 consumer price inflation forecast to 8-9 percent from 7-8 percent, due to rising liquidity and food prices, the bank said on Tuesday.
"Given the current trends, inflationary pressure could intensify toward the year-end. But tightening of monetary conditions could contain inflation later in 2011 and 2012. CPI inflation in 2010 is projected in the range of eight to nine percent, reflecting the substantial monetization of the economy and a one-off effect of rising food prices," the bank said in its Russian economic report.
"The upside risks for inflation will remain in 2011, reflecting the lag between the current money supply growth and its impact on prices, as well as possible monetization of the remaining fiscal gap. Thus, we do not expect CPI inflation to decline below eight percent in 2011 or below seven percent in 2012, unless the fiscal stance is considerably tightened."
The Economic Development Ministry has forecast inflation in 2010 at 7-8 percent, in 2011 at 6-7 percent and in 2012 at 5-6 percent.
MOSCOW, November 2 (RIA Novosti)
