CBR Quarterly Inflation Review - Q1 2006
Central bank: cbr | Type: quarterly_review | Date: 2006-03-31

THE CENTRAL BANK
OF THE RUSSIAN FEDERATION
(BANK OF RUSSIA)
Quarterly
Inflation
Review
2006 Q1
Research and Information Department
Introduction........................................................... 1
Inflation Dynamics ................................................... 3
Quantitative and Qualitative Monetary Indicators .......... 15
Statistical Addendum ............................................. 24
© The Central Bank of the Russian Federation, 2006
Research and Information Department
1 2006 Q1
Inflation Dynamics
In 2006 Q1, the trend towards the slowing
of growth in consumer prices continued in Russia.
However, growth in the prices of goods and ser-
vices included in the calculation of the core con-
sumer price index accelerated year on year. This
acceleration was attributable to faster growth in
prices in February. Core inflation was lower in
January and March 2006 than in 2005.
The most noticeable increase was registered
in food prices, excluding vegetable and fruit prices,
which rose due to considerable growth in sugar
prices resulting from high world sugar prices.
Growth in non-food prices also accelerated. Mo-
tor petrol prices grew faster than non-food prices
in January-March 2006.
The slowing of growth in the prices of paid
services provided to the population, including ad-
ministered prices, had a positive effect on con-
sumer price inflation in January-March 2006. The
growth in these prices was also curbed as Russia
adopted in 2005 amendments to Federal Law No.
210-FZ, dated December 30, 2004, “On the Prin-
ciples of Regulating Tariffs Set by House Mainte-
nance and Utility Services” and the Federal Tariff
Service’s Order No. 853-e/4, dated December 29,
2005, setting limits on growth in housing and util-
ity charges for each region.
Despite a general reduction in inflation in
January-March 2006, core inflation was higher
than in the same period of 2005 largely because
the markets of some commodities were unstable.
The inflow of foreign currency into the do-
mestic market amid the policy of restricting the
appreciation of the national currency generates a
large-scale increase in money supply, which con-
tributes to inflation in general, especially affect-
ing core inflation. The dynamics of core inflation
observed in this situation testify to its reduced sen-
sitivity to money supply growth.
The trend towards the slowing of the
annualised rate in M2 growth (from 38.6% as of
January 1, 2006, to 37.9% as of April 1, 2006) con-
tinued in 2006 Q1. However, this trend was un-
stable and weakly expressed.
Money supply growth traditionally acceler-
ates in Q2, and M2 increase over this period ac-
counts for about a third of annual growth, accord-
ing to average figures for the previous six years.
The fourth scenario of Russia’s economic devel-
opment in 2006 projects ruble supply demand to
grow 25-28% over the year as a whole. The insig-
nificant slowing of money supply dynamics in Q1
is not enough to achieve the 2006 core inflation
target. Therefore, M2 growth must slow down
more considerably. Given this trend, core inflation,
taking into account the existing lags for money
supply growth, can reach the target figures by the
end of the year, other conditions being un-
changed.
Allowing for the lags that had formed by the
end of March 2006, the money supply dynamics
along with other factors will determine the mon-
etary conditions of inflation in the next three quar-
ters of 2006, and their effect will become moder-
ate only from the middle of 2006.
The low-liquidity ruble components (time
deposits) account for most of growth in the ruble
supply and this represents a significant factor
from the viewpoint of alleviating the inflationary
consequences of monetary growth. At the same
time, the trend towards the contraction of cash in
the M2 structure, registered for most of the pe-
riod under review, contributed to lower velocity
of money and slower inflation.
The current account surplus continued to
grow in 2006 Q1. As a result, foreign currency sup-
ply exceeded demand on the domestic foreign
exchange market. In these conditions, the Bank
of Russia conducted ruble interventions on the
domestic foreign exchange market to prevent the
ruble’s excess appreciation. Measures to sterilise
money supply were taken to restrict inflationary
pressure amid growth in monetary authorities’
gold and foreign exchange reserves. The
Stabilisation Fund and the accounts of the Rus-
sian Government with the Bank of Russia helped
sterilise a considerable part of money supply. The
Bank of Russia conducted operations with its own
Introduction
2006 Q1
bonds (OBR bonds) and deposit operations as
major sterilisation instruments.
At the same time, the Bank of Russia used
instruments related to the provision of liquidity to
credit institutions, mainly repo operations and
intraday loans, more actively in 2006 Q1 year on
year.
In 2006 Q2, core inflation will be affected
(other conditions being unchanged) by the money
supply dynamics registered in the second half of
2005, the current dynamics of the foreign ex-
change rate and budget non-interest expendi-
tures, and also by the budget’s continued
sterilising function.
3 2006 Q1
Inflation Dynamics
Consumer prices
According to the Federal State Statistics Ser-
vice (Rosstat), consumer prices rose 5.0% in 2006
Q1 as against 5.3% in 2005 Q1. Consumer prices
grew 2.4% in January, 1.7% in February and 0.8%
in March.
Consumer price inflation in the moving 12-
month period equalled 10.6% in March 2006
(11.2% in February 2006), or 0.3 percentage points
higher than the figure, which corresponds to the
uniform movement towards achieving the 2006
monetary policy target (8.5%).
Core inflation equalled 2.8% in 2006 Q1
(2.4% in 2005 Q1). The prices of goods and ser-
vices included in the calculation of core inflation
rose 0.8% in January, 1.2% in February and 0.7%
in March. Core inflation in the moving 12-month
period stood at an estimated 8.7% in March 2006.
Growth in the prices of goods and services
included in the calculation of the core consumer
price index in 2006 Q1 accounted for an estimated
2.1 percentage points, or 42.4%, of overall con-
sumer price growth (as against 1.9 percentage
points, or 36.7%, in 2005 Q1).
Food prices, excluding vegetable and
fruit prices, grew 3.9% in 2006 Q1 as against 3.1%
in the same period last year. Growth in food prices,
excluding vegetable and food prices, accounted
for an estimated 1.5 percentage points, or 30.1%,
of overall consumer price growth in 2006 Q1 (as
against 1.3 percentage points, or 24.5%, in the
same period last year).
The most significant growth in food prices
in 2006 Q1 was registered in the prices of granu-
lated sugar, which increased 48.8% (in January-
March 2005, they fell 0.8%).
The rapid growth of sugar prices at the be-
ginning of the year considerably affected the level
of core inflation. In January-March 2006, growth
in sugar prices accounted for an estimated 0.7
percentage points of overall growth in the prices
of goods and services included in the calculation
of the core consumer price index.
Such price dynamics corresponded to the
trends registered on the world sugar markets. In
January-March 2006, growth in raw sugar prices
accelerated by 6.3 times and refined sugar prices
by 5.2 times compared with the same period last
year.
At the beginning of 2006, the situation on
the meat market normalised. Meat and poultry
prices increased 0.9% in 2006 Q1 as against 6.9%
in the same period last year. In 2005, growth in
poultry prices accelerated considerably compared
with 2004 (poultry prices grew 18.2% in 2005 as
against 1.1% in 2004). At the end of 2005, de-
Inflation Dynamics
2006 Q1
Consumer price inflation (%)
Growth (March 2006
on December 2005)
Growth (March 2005
on December 2004) Outcome
Prices of goods and services included in core inflation calculation 2.8 2.4 Acceleration by 1.2 times
of which:
food prices, excluding vegetable and fruit prices 3.9 3.1 Acceleration by 1.3 times
non-food prices 1.3 1.1 Acceleration by 1.2 times
Prices of paid services provided to households 8.0 12.6 Retardation by 1.6 times
of which:
prices of goods and services administered at regional or municipal level 9.9 16.9 Retardation by 1.7 times
Vegetable and fruit prices 29.3 24.0 Acceleration by 1.2 times
5 2006 Q1
Inflation Dynamics
mand for poultry fell due to the bird flu scare and
poultry prices went down 1.5% in November and
1.7% in December. At the start of 2006, this trend
continued (in Q1, poultry prices went down 7.3%).
Beef and pork prices rose 6.0% and 2.9%, respec-
tively, in 2006 Q1.
On December 5, 2005, the Russian Govern-
ment passed Resolution No. 732, which for the
first time set meat import quotas for four years in
advance. This may help foreign trade companies
to implement a more balanced policy in respect to
imports, cushioning undesirable supply-related
market fluctuations.
Fish and seafood prices rose 3.3% in 2006
Q1 as against 6.3% in the same period last year.
The prices of milk and dairy products grew
3.4% in January-March 2006 as against 3.1% in
January-March 2005.
In January-March 2006, growth accelerated
in the prices of bread and bakery products (from
1.2% to 4.6%) and pasta (from 1.5% to 1.9%).
The price dynamics of these products were
affected by the accelerated growth in producer
prices. In particular, agricultural producer prices for
cereals rose 5.5% in 2006 Q1 (in January-March
2005, they fell 0.7%).
In 2006 Q1, as in the same period of 2005,
food prices, excluding vegetable and fruit prices,
grew faster than non-food prices.
Non-food prices rose 1.3% in January-
March 2006 as against 1.1% in the same period of
2005. The biggest growth in non-food prices in
2006 Q1 was registered in the prices of tobacco
products (2.4%) and knitwear (2.0%).
Petrol prices grew 1.9% in 2006 Q1 (0.6%
in 2005 Q4). On September 19, 2005, Russia’s top
oil companies undertook to freeze petrol prices at
their filling stations. This moratorium (it was ef-
fective until late 2005) helped curb petrol price
growth considerably at the end of 2005. TNK-BP
and LUKoil oil producers kept the moratorium on
petrol price increases at the start of 2006 as well.
Food price inflation rates (%)
Growth (March 2006
on December 2005)
Growth (March 2005
on December 2004) Outcome
Bread and bakery products 4.6 1.2 Acceleration by 3.8 times
Cereals and legumes 5.7 -1.2
Pasta 1.9 1.5 Acceleration by 1.3 times
Meat and poultry 0.9 6.9 Retardation by 7.7 times
Fish and seafood 3.3 6.3 Retardation by 1.9 times
Milk and dairy products 3.4 3.1 Acceleration by 1.1 times
Butter 2.9 2.6 Acceleration by 1.1 times
Sunflower oil -0.2 1.7
Granulated sugar 48.8 -0.8
Alcoholic beverages 2.2 2.6 Retardation by 1.2 times
2006 Q1
Growth in non-food prices accounted for an
estimated 0.5 percentage points, or 9.1%, of over-
all consumer price growth in 2006 Q1 (as against
0.4 percentage points, or 6.8%, in 2005 Q1).
Vegetable and fruit prices rose 29.3% in
January-March 2006 (as against 24.0% in Janu-
ary-March 2005). The increase in vegetable and
fruit prices in 2006 Q1 was above the average
growth figure in January-March 2001-2005.
In 2006 Q1, growth in vegetable and fruit
prices accounted for an estimated 1.2 percentage
points of the general rate of inflation (23.2% of
overall consumer price growth). In 2005 Q1,
growth in vegetable and fruit prices accounted for
1.0 percentage point, or 18.7%, of overall con-
sumer price growth.
Overall growth in food prices stood at
6.2% in 2006 Q1 as against 4.9% in 2005 Q1.
The prices of paid services provided to
households were up 8.0% in January-March
2006 (as against 12.6% in January-March 2005).
Housing and utility prices grew 15.6% in 2006 Q1
(26.5% in January-March 2005), with housing
prices rising 14.1% and utility prices 16.4%. The
amendments to Federal Law No. 210-FZ, dated
December 30, 2004, “On the Principles of Regu-
lating Tariffs Set by House Maintenance and Util-
ity Services” and the Federal Tariff Service’s Order
No. 853-e/4, dated December 29, 2005, came
into force in early 2006, setting limits on growth
in housing and utility charges for each region and
establishing the procedure for monitoring their
dynamics. Housing and utility prices grew 13.8%
in January 2006 month on month. After that, their
growth slowed down to 1.0% in February and
0.5% in March.
Passenger transport and communication
fees rose 5.8% and 0.5%, respectively, in Janu-
ary-March 2006 (as against 5.8% and 0.3% in
2005 Q1).
As for other major types of services, the
most significant increase in 2006 Q1 was regis-
tered in pre-school tuition fees, which rose 9.4%
as against 16.7% in 2005 Q1.
Growth in paid service prices in 2006 Q1 was
almost two times faster than overall growth in the
prices of goods, which stood at 4.1% (3.8 times
faster in January-March 2005). Growth in paid
service prices in January-March 2006 accounted
for an estimated 1.9 percentage points, or 37.6%,
of overall consumer price growth (as against 2.6
percentage points, or 50.0%, in January-March
2005). Service prices administered at the regional
and municipal levels rose by an estimated 9.9% in
the first three months of 2006 as against 16.9%
in January-March 2005.
The analysis of the distribution
1 of con-
sumer price increases (March on December of
previous year) in 2002-2006 was made for a
1 This distribution has been built on the basis of a smoothed histogram. The length of the interval (4 percentage points) was
selected so that each interval included a sufficient number of observations, while the histogram reflected the qualitative charac-
teristics of the sample distribution.
7 2006 Q1
Inflation Dynamics
sample comprising more than 400 consumer
goods and services without taking into account
their weights in consumer spending.
In the past five years, increases in the prices
of more than two-thirds of all consumer goods
and services in Q1 have not exceeded 2-4%. At the
same time, in January-March 2006, the prices of
almost a half of consumer goods and services
(44.7%) grew within the range of 0-2%.
Throughout the past three years, the me-
dian, which in this kind of distribution
characterises growth in the prices of most of the
goods and services, has been close to 2% (it stood
at 1.9% in 2004 Q1, 2.1% in 2005 Q1 and 2.1% in
2006 Q1). The distribution average decreased by
0.4 percentage points in 2006 Q1 year on year and
stood at 3.4%. The standard deviation, which
characterises the extent of price growth differ-
ence from the average, fell to 6.3% from 7.6% a
year earlier but was larger than in 2003-2004. The
dispersion of price increases narrowed in January-
March 2006 year on year as the standard devia-
tion in the services sector decreased considerably
(from 11.2% to 5.3%). In 2006 Q1, the median was
the highest in the food products sector and the
lowest in the non-food products sector.
A statistical analysis of food price increases
indicated a rise in the distribution average and the
distribution median in January-March 2006 year
on year. In 2006 Q1, the prices of almost a half of
all food products grew within the range of 2-4%.
The standard deviation had been the largest since
2002 and reached almost 11% as there was a rela-
tively large group of goods (more than 7%) with
price growth of over 20%.
The distribution of non-food price increases
was characterised by a pronounced maximum and
small standard deviation. Consequently, the in-
creases in the prices of most of the goods in this
group stayed within a narrow range. The goods
whose prices rose in the 0-2% range in January-
March 2006 accounted for 70.5% of all non-food
products (58.0% in the same period of 2005). The
standard deviation for non-food products was
1.4% or 4.5 times smaller than the standard de-
viation for goods and services as a whole.
The distribution of service price increases in
2006 Q1 was characterised by a peak correspond-
ing to the 2-6% price growth range. In 2005, there
2006 Q1
was a large share of services whose prices went
down, and also a large share of services with the
price growth of over 20%. As a result of this price
distribution, the standard deviation decreased to
5.3% or 2.1 times smaller than in 2005 Q1.
According to Rosstat’s data, in most of
Russia’s federal districts consumer prices grew
less in 2006 Q1 than in the same period of 2005.
The exceptions were the Urals and Siberian Fed-
eral Districts. In the North-Western, Siberian and
Far Eastern Federal Districts consumer prices grew
slower than in Russia as a whole by 0.4-1.0 per-
centage points.
According to estimates, differences be-
tween the constituent members of the Russian
Federation with respect to the cost of a fixed set
of goods and services used by the Federal State
Statistics Service for interregional comparisons of
household purchasing power increased in 2006 Q1.
The regional difference ratio
2 increased to 44%
in January-March 2006 as against 43% in Janu-
ary-March 2005.
In January-March 2006, vegetable and fruit
prices demonstrated the largest differences in
growth rates by region. Thus, vegetable and fruit
prices grew 34.7% in the Central Federal District
and 13.0% in the Far Eastern Federal District.
Growth in the prices of non-food products and
foodstuffs, excluding vegetables and fruit, was,
on the contrary, roughly the same in all federal
districts.
In January-March 2006, growth in the prices
of paid services provided to households slowed
down considerably in all federal districts compared
with the same period last year. The most consid-
erable slowdown was registered in the Southern
and Far Eastern Federal Districts where growth
decelerated by 7.2 and 7.9 percentage points, re-
spectively (in Russia as a whole, growth in service
prices decelerated by 4.6 percentage points).
According to data provided by the Institute
of the Economy of the Transitional Period, the in-
flationary expectations of managers of the lead-
ing industrial enterprises in January-March 2006
were a little lower than in the same period last year.
Thus, 29-36% of respondents predicted growth
in selling prices in 2006 Q1 as against 28-38% in
2005 Q1.
Producer Prices
Industrial producer prices gained 6.0% in
2006 Q1 as against 4.3% in January-March 2005.
Compared with the previous year, the contribu-
tion of producer price increases in the mining sec-
tor to producer price growth was significant in
2006 Q1 (2.4 percentage points, or 40.4%, ac-
cording to estimates). In 2005 Q1, this contribu-
tion equalled 0.6 percentage points or 14.9%. In
2 The regional difference ratio is calculated as the difference between the cost of a fixed set of goods and services in the mos t
expensive and the cheapest regions relative to the national value of the same set.
9 2006 Q1
Inflation Dynamics
the first three months of 2006, growth in producer
prices in this sector was 1.8 times faster than in
industry as a whole and made up 10.8%, while fuel
and energy producer prices rose 12.0% (3.3% and
2.8% in 2005 Q1).
Producer prices in the manufacturing sec-
tor grew 3.5% in 2006 Q1 (2.8% in January-March
2005). The most significant producer price growth
in this sector in 2006 Q1 was registered in the pro-
duction of petroleum products (15.5%). In Janu-
ary-March 2005, producer prices of petroleum
products fell 2.5%.
Competition, especially by importers, con-
tinued to affect price formation in the manu-
facturing sector, which is largely oriented to con-
sumer demand. This became apparent as producer
prices of food, including beverages, tobacco, tex-
tile and clothing and leather, leather goods and
footwear in 2006 Q1 grew more slowly than in the
manufacturing sector as a whole.
In the manufacturing industries whose out-
put goes to the consumer goods market, price
growth accelerated in 2006 Q1 year on year only
in the production of food, including beverages,
and tobacco (from 1.1% to 2.9%). At the same
time, price growth slowed to 0.6% in textile and
clothing production, and to 2.1% in the produc-
tion of leather, leather goods and footwear. In
January-March 2005, producer prices in these
types of activity rose 1.4% and 2.6%, respectively.
Estimates indicate that growth in producer
prices in industries whose output goes directly to
the consumer goods market in January-March
2006 accounted for 1.4 percentage points of
growth in the prices of goods and services included
in the calculation of core inflation (0.6 percent-
age points in the same period of 2005).
Producer prices in the production, transmis-
sion and distribution of electricity in 2006 Q1 rose
9.2% as against 10.8% in January-March 2005.
Freight transportation charges increased 5.5% in
2006 Q1 (13.9% in 2005 Q1). As was the case in
2005, railway fares grew 8.8% in January-March
2006.
Communication fees for corporate enti-
ties have been observed to decline over the past
two years in Q1. Thus, they fell 0.3% in January-
2006 Q1
March 2004, 0.9% in the same period of 2005 and
0.5% in 2006 Q1.
There was moderate growth in the prices of
building materials in the first three months of
2006 (1.9%) as a year earlier (2.8%).
Agricultural producer prices rose 3.2% in
2006 Q1 (2.5% in 2005 Q1). The main contribu-
tion to price increases was made by growth in crop
growers’ prices, which rose 7.7% in the first three
months of 2006 as against 2.4% in the same pe-
riod last year. The most significant growth over
that period was registered in potato and vegetable
prices, which went up 27.4% and 26.1%, respec-
tively (14.5% and 17.1% in 2005 Q1).
Livestock breeder prices rose 0.6% in Janu-
ary-March 2006 (2.5% in January-March 2005).
Cattle and poultry prices declined 1.0% (in Janu-
ary-March 2005, they rose 4.8%). As was the case
last year, egg producer prices went down 1.7% in
2006 Q1 (in January-March 2005, they fell 11.0%).
Demand
Domestic demand
Economic development parameters in 2006
Q1 were primarily determined by the consumer and
investor components of domestic demand.
Real consumer spending increased 10.3% in
January-March 2006 year on year. The increase in
consumer demand was attributable to fast growth
in real disposable money income, which rose 8.3%
in 2006 Q1 (3.5% in the same period of 2005).
Retail trade turnover expanded 10.2% in 2006 Q1
year on year (10.5% in 2005 Q1), while the amount
of paid services provided to the public grew 6.3%
(3.1%). In the structure of retail trade turnover,
the sales of non-food products grew faster than
the sales of food products.
Fixed capital investment grew 5.1% in 2006
Q1 (8.0% in January-March 2005). Fixed capital
investment grew slower over that period as invest-
ment activity declined during the first two months
of 2006 due to severe colds.
In 2005, the largest funds were invested in
the development of transport and communica-
tions, manufacturing industries, and also in the
mining sector (investments in these types of ac-
tivity accounted for 61.6% of total investment in
the fixed assets of large and medium-sized
organisations). Compared with 2004, the share
of manufacturing industries in the structure of
fixed capital investment in 2005 increased from
17.4% to 17.6% and transport and communica-
tions from 25.0% to 28.8%, whereas the share
of investment in fuel and energy production de-
clined from 16.8% to 15.2%.
In the past few years, the structure of fixed
capital investment by type has been characterised
by a considerable share of investments in the ac-
tive part of fixed assets (in 2005, it stood at 38.5%
as against 38.8% in 2004). Considerable invest-
ments in machinery and equipment facilitated the
technical retooling of fixed assets and became a
major factor of growth in labour productivity and
created conditions for price control.
11 2006 Q1
Inflation Dynamics
Foreign demand
World economy and international finan-
cial markets
World economic growth continued in 2006
Q1. According to preliminary data, GDP rose 3.5%
in the United States in January-March 2006 year
on year (3.6% in 2005 Q1), 2% in the eurozone
(1.2%) and 10.2% in China (9.9%). Estimates
show that eurozone industrial output grew con-
siderably faster in the first three months of 2006
than in the same period of 2005. According to IMF
estimates, the world production of goods and ser-
vices will expand 4.9% in 2006 (4.8% in 2005)
According to the IMF’s forecast, this growth will
accelerate in 2006 due to a rebound in economic
activity in the eurozone, Japan and new Asian in-
dustrial centres, while GDP will continue to grow
at a high rate in the United States and China.
The US trade deficit increased by $24.4 bil-
lion in January-March 2006 year on year as im-
ports grew faster than exports. From the view-
point of the commodity structure, the US trade
deficit widened due to different rates of growth
in the export and import of industrial primary
goods and raw materials, especially due to larger
crude imports in terms of value. The deficit of US
trade with China accounted for about a quarter
of the United States’ total trade deficit (the same
ratio was registered in the first three months of
2005). In China, growth in the export of goods
slowed down, while growth in imports accelerated
in 2006 Q1 year on year. Nevertheless, exports
continued to grow faster than imports. China’s
trade surplus increased to $23.3 billion in January-
March 2006 from $16.6 billion in January-March
2005.
US inflation stood at 1.5% in March 2006
compared with December 2005 (in March 2005,
it stood at 1.6%). Core inflation
4 was the major
factor of the change in the general level of con-
sumer prices in the United States in the period
under review. The second (considerably less im-
portant) factor was growth in energy prices. The
prices of motor fuel grew 9.9% in March 2006 on
December 2005 (9.1% in March 2005 on Decem-
ber 2004), while the prices of energy products
used in the housing and utility sector
5 went up
0.1% (0.3%). Food prices rose 0.6% in March
2006 on December 2005 (0.3% in March 2005
on December 2004). Their growth did not exert
considerable influence on the change in the gen-
eral level of consumer prices.
US core inflation stood at 1.4% in March
2006 on December 2005 (1.5% in March 2005 on
December 2004). The higher housing charges,
which grew 1.9% (2.1% in March 2005) tradition-
ally made the biggest contribution to core infla-
tion. The raising of short-term interest rates by the
Federal Reserve in 2005 proved to be an effective
instrument to contain core inflation. In 2006 Q1,
the US Federal Reserve continued to raise interest
rates.
Eurozone inflation stood at 0.4% in March
2006 on December 2005 (in March 2005, it also
equalled 0.4%). The growth in energy prices,
which rose 3.3% (4% in March 2005), and also
the prices of foodstuffs, alcoholic beverages and
tobacco products, which increased 1% (also 1%
in March 2005) was a principal inflationary fac-
tor. Motor fuel and lubricant prices rose 3.2%
(5.1% in March 2005) and the price of energy used
in the household sector gained 3.5% (2.7%). Veg-
etable and fruit prices grew 2.7% (5.8%) and the
prices of meat and dairy products went up 0.4%
(0.1%).
Consumer prices for a set of goods and ser-
vices included in the calculation of core inflation
in the eurozone
6 dropped 0.2% in March 2006
on December 2005 (0.1% in March 2005) due to
a decline in the prices of clothing and footwear,
and in the prices of goods and services in the
sphere of leisure and entertainment. In each sepa-
rate month in 2006 Q1, eurozone inflation was
higher than the medium-term inflation target,
which the European Central Bank seeks to achieve
through its monetary policy (the ECB is set to keep
inflation close to consumer price growth of 2% in
each reporting month relative to the same month
of the previous year).
3 World Economic Outlook (IMF), April 2006.
4 Core inflation in the United States signifies growth in the prices of goods and services included in the consumer goods basket,
except foodstuffs and energy products.
5 Fuel oil, boiler fuel, coal, household gas, electricity.
6 Eurozone core inflation signifies growth in the prices of goods and services included in the consumer goods basket, except
foodstuffs, alcoholic beverages, tobacco and energy products.
2006 Q1
As for the emerging market countries,
which account for substantial portions of Russia’s
trade turnover, inflation slowed down signifi-
cantly in March 2006 on December 2005 in
Ukraine (to 2.7% from 4.4% in March 2005),
Belarus (to 1.6% from 2.7%), Hungary (to 0.9%
from 1.8%) China (to 0.7% from 1.5%), India (to
0.2% from 0.8%) and the Republic of Korea (to
1.5% from 2.1%). At the same time, inflation in-
creased noticeably in Kazakhstan (to 3.2% from
1.9% in March 2005), Slovakia (to 2.7% from
1.9%), and the Czech Republic (to 1.4% from
0.8%). The level of consumer prices in Japan was
unchanged in March 2006 on December 2005 (it
fell 0.4% in March 2005 on December 2004).
The US Federal Reserve raised the bench-
mark overnight interbank interest rate (the
federal funds rate) two times in January-March
2006: from 4.25% to 4.5% in January and to
4.75% in March. From June 2004 to December
2005, the federal funds rate was raised by 3.25
percentage points. Since December 2004, it has
exceeded the ECB’s refinance rate, which was
raised from 2% to 2.25% in December 2005 and
to 2.5% in March 2006.
LIBOR rates on US dollar-denominated
deposits
7 with terms from one month to one year
increased by 0.4 percentage points in March 2006
on December 2005. The yield on US treasuries with
maturities from two to ten years rose by 0.3 per-
centage points. LIBOR rates on US dollar-denomi-
nated deposits with all terms and the yields on US
Federal Treasury bonds with all maturities were
higher in March 2006 than LIBOR rates on euro-
denominated deposits and the yields on eurozone
securities.
In the first three months of 2006, the US
dollar depreciated against the major interna-
tional reserve currencies on foreign financial
markets due to rising imbalances in US foreign
trade and the forecasts of interest rate increases
in the eurozone and Japan. The dollar weakened
1.5% against the euro and 0.9% against the Japa-
nese yen in March 2006 on December 2005. The
dollar also depreciated against some other cur-
rencies of importance for the Russian economy
(the Turkish lira, Kazakhstan tenge, Polish zloty,
7 Source here and below: Reuters news agency.
13 2006 Q1
Inflation Dynamics
South Korean won, Lithuanian litas, Swedish
krona, Indian rupee, Czech koruna, Slovak koruna,
Romanian leu, Brazilian real, Estonian kroon and
Latvian lat). The dollar depreciated 0.5% against
the Chinese yuan.
External economic conditions
The prices of Russia’s major raw material
export commodities, especially energy products,
continued to grow in 2006 Q1. The aggravation of
the political situation around the Iran nuclear
programme and unstable oil production in some
regions of the world (Iraq, Nigeria) were the main
factors of growth in oil prices. Also, world demand
for oil continued to grow faster than oil produc-
tion and oil exports. World oil prices reached their
new record high in 2006 Q1. The average price of
Brent, Dubai and WTI crude in January-March
2006 rose 32.2% year on year to $61 per barrel.
The price of Urals crude increased 34.0% to $57.7
per barrel.
The situation on world commodity markets
in the first three months of 2006 was favourable
for Russian exporters. The prices of major Russian
export commodities
8 continued to grow, although
more slowly than in the same period of 2005. Ac-
cording to Bank of Russia estimates, the compos-
ite world price index adjusted for the structure of
Russian exports of commodities that account for
over 70% of their value equalled 1.07 in March
2006 on December 2005 (1.21 in March 2005 on
December 2004). Energy prices rose 8% on aver-
age (25% in March 2005) while non-energy prices
were actually unchanged (they increased 9% in
March 2005).
The price of Urals crude grew 7.0% in March
2006 on December 2005 to $57.6 per barrel
(34.5% in March 2005). The price of natural gas
on the European market was up 6.7% (it rose
10.2% a year earlier), premium petrol 15.0%
(28.3%), diesel fuel 10.9% (23.5%) and fuel oil
19.2% (45.2%). Non-ferrous metal prices rose
8.7% on average in March 2006 on December
2005 (9.8% in March 2005) while ferrous metal
prices were unchanged (they went up 6.4% a year
earlier).
Food prices
9 on world markets demon-
strated different dynamics in the first three
months of 2006. Meat prices, which had been
high in the previous two years, were largely ob-
served to go down in January-March 2006. Beef
prices fell 3.7% in March 2006 on December 2005
(they grew 1.7% a year earlier) and poultry and
pork prices declined about 3-4% (in March 2005,
poultry prices rose 0.4%, whereas pork prices
went down 3.8%).
Foreign analysts expect sugar price growth
to continue in 2006 amid falling world sugar pro-
duction and stocks and rising sugar demand in
many regions of the world. The price of raw sugar
rose 25.2% and the price of refined sugar went
up 36.4% in March 2006 on December 2005 (in
March 2005, they increased 4.0% and 7.0%, re-
spectively). The biggest growth was registered in
December 2005, January and February 2006,
when the monthly price of raw sugar grew 10-16%
and refined sugar 14-17%. However, the price of
raw sugar went down and growth in the price of
refined sugar slowed down considerably in March
on favourable forecasts of sugarcane harvests in
major sugar producing countries, particularly, in
8 Average prices have been calculated on the basis of data provided daily by the following news agencies and exchanges:
Reuters for oil, Petroleum Argus for petroleum products (petrol, diesel fuel and fuel oil) and the London Metal Exchange for
non-ferrous metals (aluminium, copper and nickel). Average monthly prices of natural gas and ferrous metal price indices have
been calculated on the basis of data provided by the World Bank, and other goods on the basis of data provided by the IMF.
9 Average prices have been calculated on the basis of data provided daily by the London Commodity Exchange for raw and
refined sugar, average monthly prices of beef are based on data from the World Bank and the prices of pork and poultry are
based on data provided by the IMF.
2006 Q1
Brazil and Thailand. Thus, the price of raw sugar
fell 3.7% and the price of refined sugar went up
2.3% in March 2006 month on month.
As export prices rose faster than import
prices in Russia, the terms of Russia’s trade with
foreign countries
10 were considerably better in
2006 Q1 than in the same period last year. How-
ever, growth in the terms of trade index deceler-
ated in January-March 2006 year on year.
The favourable price situation on world en-
ergy markets and the accelerated growth of the
export volumes of some commodities affected
export dynamics significantly. Exports grew
34.4% in 2006 Q1 to $67.4 billion (34.6% in 2005
Q1). The value of exports grew largely due to the
export of energy products.
Growth in imports slowed down slightly in
2006 Q1. Imports expanded 21.8% in January-
March 2006 year on year to $31.2 billion (28.8%
in 2005 Q1). As was the case in 2005 Q1, growth
in imports was largely due to the expansion of
import volumes. Growth in the contract prices of
some food and agricultural raw material imports
accelerated in 2006 Q1 compared with the same
period of 2005.
Supply
In January-March 2006, the macroeco-
nomic situation was characterised by the growth
of production in the key economic sectors. Out-
put in the key sectors of the economy rose 4.8%
in 2006 Q1 year on year (3.3% in January-March
2005).
The industrial output index equalled 103.0%
in 2006 Q1 (103.2% in 2005 Q1). The slowing of
industrial output growth in January-March 2006
was due to the slowdown of production growth
in the manufacturing sector (from 4.1% in Janu-
ary-March 2005 to 2.8% in January-March 2006)
and in the mining sector (from 2.2% to 1.3%). At
the same time, growth accelerated considerably
(by 3.4 times) in 2006 Q1 in the production and
distribution of electricity, gas and water due to
increased electricity and heating consumption in
the first two months of 2006 as a result of severe
colds.
In the manufacturing sector, output de-
clined considerably (by 12.6%) in 2006 Q1 in the
production of machinery and equipment (it was
observed to grow in the same period of 2005).
Output in all the key industries oriented to final
consumption expanded in January-March 2006
year on year. After decline in 2005 Q1, the pro-
duction of textile and clothing and leather, leather
goods and footwear increased considerably in
January-March 2006 (9.6% and 11.8%, respec-
tively).
High growth rates were registered in 2006
Q1 year on year in the production of meat and
meat products (9.9%), and also fish and seafood
(6.2%), which led to the slowing of growth in the
prices of meat and fish on the consumer goods
market. In January-March 2006, granulated sugar
output declined 18.3% year on year. However, in
March, it exceeded last year’s figure by 1.6 times
and this growth had a positive effect on the dy-
namics of granulated sugar prices on the con-
sumer goods market.
Agricultural output expanded 1.3% in 2006
Q1 year on year (it fell 0.1% in January-March
2005). In January-March 2006, the output of
major livestock products was observed to grow.
Labour market
The number of people employed in the
economy in early 2006 continued to grow, as in
2005. In January-March 2006, the number of job-
holders rose 1.8% (1.5% in January-March 2005).
Production expanded faster than job numbers,
which was evidence of increase in labour produc-
tivity. Labour productivity rose by an estimated
2.8% in 2006 Q1 (3.4% in 2005 Q1). Therefore,
the intensive factors of growth remained impor-
tant, containing price growth in the economy.
Wage increased at rapid rates in 2006 Q1,
faster than labour productivity. The gap between
growth in real wage and labour productivity wid-
ened in January-March 2006 year on year, creat-
ing conditions for further price increases.
The number of jobless calculated according
to the ILO methodology continued to decline and
in 2006 Q1 it fell 5.4% as against 10.3% in 2005
Q1. In January-March 2006, the total number of
unemployed accounted for 7.7% of the economi-
cally active population as against 8.2% in Janu-
ary-March 2005.
10 The ratio between export and import prices.
15 2006 Q1
Quantitative and Qualitative Monetary Indicators
Exchange rate
Against the background of favourable ex-
ternal economic conditions, exporters’ foreign
currency earnings continued to flow in large
amounts into the domestic market during the first
quarter of 2006 (the average price of oil exported
by Russia was about $58 per barrel over that pe-
riod). The dollar/ruble and euro/ruble rates were
determined by the changes in the dollar/euro rate
on international markets and the policy of the
Bank of Russia. The dollar/ruble and euro/ruble
rates grew considerably less dependent on the
world market situation in January and February
2006 year on year, as the Bank of Russia stepped
up its participation in foreign currency trading and
its influence on domestic foreign exchange mar-
ket participants’ expectations increased.
On March 27, the Bank of Russia announced
its decision to lower from 10% to zero the require-
ment for the obligatory sale of exporters’ foreign
currency earnings on the domestic foreign ex-
change market for the purpose of its further
liberalisation. Experts say that this decision, after
it comes into force, will not affect considerably
the volume of foreign exchange trading because
the amounts of foreign currency voluntarily sold
by exporters to the Bank of Russia, a foreign ex-
change principal buyer, have significantly ex-
ceeded this requirement over the past few years.
In 2006 Q1, the average dollar/ruble rate fell
1.9% to 28.16 rubles to the dollar. The US currency
was observed to depreciate against the ruble dur-
ing the entire quarter: the average dollar/ruble
rate declined 1.4% in January, 0.8% in February
and 1.1% in March to 28.41, 28.20 and 27.88 rubles
to the dollar, respectively.
The dollar appreciated against the euro on
international markets in February largely due to
the Federal Reserve’s decision to raise from Janu-
ary 31 the federal funds rate by 0.25% to 4.5%
p.a. and the market participants’ expectations of
further rate increases. Despite that, the US dollar
was observed to depreciate against the ruble on
the Russian foreign exchange market. For the pur-
pose of achieving the full-year inflation target, the
Bank of Russia did not take any specific measures
restricting the growth of the national currency. In
March, the US currency continued to depreciate
against the ruble due to the dollar’s weakening
against the euro on international foreign exchange
markets. As a result, the official dollar/ruble rate
had declined 3.8% since the beginning of the year.
On the domestic euro market, changes in
the euro/ruble rate followed the euro/dollar dy-
namics on international markets. At the same
time, Russian foreign exchange market partici-
pants expected the ruble to continue its gradual
appreciation with the support of the Bank of Rus-
sia. As a result, the euro/ruble rate in Russia grew
more slowly than the euro/dollar rate on interna-
tional markets during the entire quarter.
The average monthly euro/ruble rate rose
0.3% in January month on month to 34.25 rubles
to the euro and fell 1.5% in February to 33.73
rubles to the euro. In March, market participants’
expectations were influenced by the ECB’s deci-
sion made on March 2 to raise the refinancing rate
by 0.25% to 2.5% p.a. As a result, the average
monthly euro/ruble rate dropped only 0.7% to
33.49 rubles to the euro.
Quantitative and Qualitative Monetary Indicators
2006 Q1
The structure of the bi-currency basket 1 re-
mained unchanged in 2006 Q1 at 0.6 dollars and
0.4 euros. In January-March 2006, the ruble
gained 2.9% against the bi-currency basket.
The real effective rate of the ruble against
foreign currencies rose 4.7% in 2006 Q1 quarter
on quarter. Month on month, growth in the real
effective ruble rate equalled 2.3% in January and
February and slowed to 1.6% in March. The higher
rates of the ruble’s growth in January and Febru-
ary could be largely attributed to the high level of
inflation rather than to measures taken by the
Bank of Russia on the foreign exchange market
to curb inflation.
The steady inflow of exporters’ considerable
foreign currency earnings into the domestic mar-
ket and their purchase by the Bank of Russia dur-
ing the entire quarter contributed to growth in
Russia’s international reserves. As a result, Russia’s
international reserves had grown by $23.6 billion,
or 13%, since the beginning of the year to $205.9
billion as of April 1, 2006.
Interest rates
There was no single interest rate trend on
the Russian financial market in 2006 Q1. The rates
on loans to non-financial borrowers declined
slightly, while deposit rates slightly increased.
Ruble revaluation expectations prevailed on the
market, inflation growth rates were traditionally
high in January-March and the ruble liquidity of
credit institutions remained at a high level.
The lower limit of the Bank of Russia in-
terest rate band formed by the rates on deposit
operations on standard terms rose from 0.5% p.a.
to 1% p.a. in 2006 Q1 (in March) on “tom-next
deposits.” In April, it rose again to 1.5% p.a. The
upper limit (overnight credit rate) was unchanged
at 12% p.a. Average weighted interest rates at
deposit auctions were in the narrower range than
in the previous quarter: they ranged from 1.96%
to 2.20% p.a. at four-week deposit auctions (a
little higher than the previous quarter’s level) and
from 4.25% to 4.8% p.a. on three-month depos-
its. The average weighted yield on transactions
with Bank of Russia bonds ranged from 3.8% to
4.07% p.a. The average interest rate on repo op-
erations, the principal market instrument used in
providing liquidity in the first quarter, decreased
slightly to 6.14%.
Money market interest rates and rates on
commercial banks’ operations remained within the
Bank of Russia interest rate band in 2006 Q1. The
MIACR on overnight ruble-denominated credit
ranged between 0.78% and 8.86% p.a. in Janu-
ary-March (in the first quarter of the previous
year, it was less volatile and varied between 0.65%
and 2% p.a.)
1 The bi-currency basket has been used by the Bank of Russia as an operational benchmark of its exchange rate policy on the
domestic foreign exchange market since February 1, 2005. Since December 2, 2005, the bi-currency basket has been set at 0.6
dollars and 0.4 euros.
17 2006 Q1
Quantitative and Qualitative Monetary Indicators
The average interest rate on loans extended
to non-financial enterprises for all terms fell by
0.8 percentage points in January month on month
to 10.4% p.a. It rose by 0.5 percentage points in
February but returned to its January level in March.
The first-quarter average stood at 10.5% p.a. and
was 0.6 percentage points lower than in the fourth
quarter of 2005. This decrease was due to a fall in
interest rates on loans with terms up to one month
(by 0.9 percentage points) and in interest rates
on loans with terms from one month to three
months (by 0.3 percentage points). Interest rates
on longer-term loans either remained unchanged
or grew in the first quarter.
The continued growth in the demand for
credit in the household sector along with the in-
creased cost of consumer credit services and credi-
tors’ rising risks due to the active expansion of the
group of borrowers prompt banks to keep inter-
est rates on credit to individuals higher than on
credit to enterprises. However, increasing compe-
tition among creditors compel them to reduce the
cost of consumer credit. The average quarterly in-
terest rate on credit to households for all terms in
2006 Q1 decreased by 1.2 percentage points quar-
ter on quarter to 19.5% p.a. The most significant
decrease in interest rates was registered in the
sector of three- to six-month credits, whereas
rates on credits with other terms declined more
slowly or slightly increased.
The interest rate on household time depos-
its increased. The average interest rate on house-
hold time deposits in the first quarter gained 0.6
percentage points quarter on quarter and stood
at 7.9% p.a. This increase was attributable to
growth in the rates on deposits with the term of
over one year. As in the previous quarter, depos-
its with terms from six months to one year had
the highest interest rates. However, the average
interest rate on these deposits fell by 0.1 percent-
age points in 2006 Q1 quarter on quarter and stood
at 9.9% p.a.
The yield curve on bank lending operations
in the first quarter had a rising slope in the seg-
ment of credits with terms of up to three years
and retained its negative inclination in the segment
of credits with terms of over three years. The yield
curve in the shortest-term and the longest-term
2006 Q1
segments was almost unchanged, probably re-
flecting the persisting short-term inflationary ex-
pectations of market operators.
A weak yield uptrend prevailed in the first
quarter in all the segments of the ruble-denomi-
nated government bond market, except the seg-
ment of OFZ-ADpk (debt depreciation and float-
ing coupon income) federal loan bonds. The ef-
fective indicator of the OFZ market portfolio rose
by 0.03 percentage points at the end of 2006 Q1
quarter on quarter to 6.81% p.a. The average quar-
terly effective indicator of the OFZ market port-
folio declined by 0.18 percentage points to 6.81%
p.a.
The government bond yield curve retained
its normal shape in the first quarter. A slight de-
crease in yields at the end of the period under re-
view caused the curve to move down a little. Its
inclination continued to decrease as the yield on
longer-term bonds declined faster than the yield
on shorter-term bonds. In the segment of over 13
years, the OFZ yield curve was almost flattened
as there were few instruments with this maturity
and it was hard to assess accurately the risks of
investment for such long periods. Investors’ as-
sessments of the reliability and liquidity of ruble-
denominated government bonds for all terms
were unchanged.
19 2006 Q1
Quantitative and Qualitative Monetary Indicators
The prices of most ruble-denominated in-
struments of the financial market changed mod-
erately in the first quarter. The interest rate struc-
ture by term of instrument remained balanced
enough. The yield curves of key financial instru-
ments had a normal shape suggesting that the
yield on financial instruments was in direct pro-
portion to their maturity periods. Russian finan-
cial market players did not expect any consider-
able changes in medium-term inflation rates.
Money
The annualised M2 growth rate (month on
month of previous year) slowed from 38.6% as
of January 1, 2006, to 37.9% as of April 1, 2006.
In January-March 2006, the M2 growth stood at
2% and was slower than growth in the first quar-
ter of 2005 and the average first-quarter growth
since 1999. Nevertheless, there was no stable trend
towards the slowing of money supply growth in
the period under review. The M2 growth was big-
ger in March and April 2006 than in March and
April 2005. Therefore, from the viewpoint of
keeping to the M2 growth projections for 2006
(25-28%), the money supply growth rates remain
high and continue to exert pressure on inflation.
Allowing for the lags, the rates of growth
in the money supply that have formed by now will
continue to affect core inflation until the end of
2006. If M2 growth continues to slow down on
an annualised basis (and money supply growth
decelerates more considerably), the monetary
pressure on inflation may decrease. The current
assessments of core inflation affected by the
monetary dynamics of the previous months sug-
gest that the core inflation target may be exceeded
by the end of 2006.
The gap between M2 and GDP growth rates
has been increasing since the second half of 2005.
The gap between the rates of growth in GDP and
the broader monetary aggregate M2X, which
comprises non-cash foreign exchange kept by
economic agents, also widened in the first quar-
ter. However, this increase was smaller due to the
aggregate’s slower growth compared with growth
in ruble supply. The gap between the rates of eco-
nomic growth (in terms of GDP) and the money
supply (in terms of both M2 and M2X) was wider
at the end of 2006 Q1 than at the end of 2005 Q1.
The dynamics of the velocity of money are impor-
tant for the assessment of the effect of this gap
on inflation. In 2006 Q1, the velocity of money in
terms of the M2 aggregate decreased 4% as
against 1.3% in the same period of 2005. There-
fore, the trend towards the slowing of decline in
the velocity of money, registered since the sec-
ond half of 2004, came to a halt, and in the first
quarter it began to decrease somewhat faster due
to the structural changes in the money supply. The
2 The gap characterises the part of monetary growth that exceeds the amount necessary to finance the increased volume of
transactions. The expansion of the gap may testify to the inflationary pressure by money supply growth on price dynamics.
2006 Q1
money velocity dynamics and a further slowing of
the annualised money supply growth may ease
inflationary pressure.
Cash growth (month on month of previous
year) was slower than M2 growth at the end of
the first quarter and the gap between M0 and M2
increases was wider as of April 1, 2006, than as of
the same date a year earlier. Slower rates of M0
growth reflect favourable changes in the M2
structure and the structure of M2 growth from the
viewpoint of its influence on inflation.
The aggregate Money in the monetary
survey definition, which is similar to the M1 ag-
gregate and comprises the most liquid transac-
tional components of the money supply, reflects
the economic situation and liquidity preferences.
In 2006 Q1, it was actually unchanged, and its
annualised growth (month on month of previous
year) slowed insignificantly, from 35.5% as of
January 1, 2006, to 34.8% as of April 1, 2006. The
annualised rates of growth (month on month of
previous year) both in cash and non-cash trans-
action money fell by about 1 percentage point in
January-March. Annualised M0 growth was faster
than in the same period last year (30.2% as of April
1, 2006, as against 27.1% as of April 1, 2005), while
the annualised growth rates of the M1 non-cash
component were considerably higher than a year
earlier (40% as of April 1, 2006, and 27.8% as of
April 1, 2005).
The M1 non-cash component is comprised
by about 80% of non-financial enterprise sector
funds and its increase reflects economic agents’
rising demand for money to conduct transactions
and service the payment turnover. The faster
growth in non-cash transaction money creates less
inflationary pressure compared with cash because
cash has great potential and a longer lag of im-
pact on inflationary processes.
Cash growth had the biggest influence on
inflationary processes in early 2006: consumer
prices went up in January after the M0 aggregate
grew considerably in December (mainly due to the
traditional growth in budget expenditures). In Feb-
ruary-March, the influence of cash growth dy-
namics on inflation was, most likely, moderate.
Following the seasonal trends of the past
few years, the M0 aggregate contracted 4% in
2006 Q1 (3.5% in 2005 Q1) mainly due to the re-
duction of cash in circulation in January. Amid
some slowing of growth in household money in-
come, cash growth rates in February-March 2006
were lower than in January-February 2005 when
the government began to replace benefits in kind
with cash payments. The M0 dynamics were es-
pecially affected by the fluctuations of household
demand for foreign currency cash. Household net
demand for foreign currency cash was tradition-
ally lower in 2006 Q1 than in 2005 Q4. At the same
time, this demand did not change significantly
compared with 2005 Q1. This means that the
ruble’s faster appreciation against the dollar and
the euro in 2006 Q1 compared with 2005 Q1 has
not yet affected considerably economic agents’
21 2006 Q1
Quantitative and Qualitative Monetary Indicators
asset currency preferences. The persisting surplus
of household operations with foreign currency
cash in January-March 2006 restrained cash
growth. As a result, the trend towards the slow-
ing of M0 growth in the moving 12-month period
continued in January-March 2006 (from 30.9%
as of January 1, 2006, to 30.2% as of April 1,
2006). The cash share in the M2 structure also
declined steadily enough (it stood at 31.3% as of
April 1, 2006, and was 1.8 percentage points
smaller than as of the same date a year earlier).
The above trends in the cash dynamics had little
effect on inflation in 2006 Q1. The persisting trend
towards the slowing of M0 growth in the moving
12-month period is a very important factor for
achieving the 2006 inflation target.
Compared with the Money aggregate, the
Quasi-money aggregate increased in 2006 Q1.
The aggregate Quasi-money comprises less liquid
components of money supply used by economic
agents as savings. In January-March 2006, the
growth in Quasi-money stood at 5.2% but its
annualised growth (month on month of previous
year) decelerated to 34% as of April 1, 2006, from
37.2% as of January 1, 2006, and was slower than
as of April 1, 2005 (35.7%).
The January-March Quasi-money dynamics
were the result of growth in its foreign currency
and ruble components, that is, time deposits. In
the first quarter, time deposits increased 5.8%,
but their annualised growth slowed by 2 percent-
age points to 44.2%. Growth in time deposits de-
2006 Q1
nominated in the national currency accelerated
year on year (37.2% as of April 1, 2005). The per-
sisting fast growth in ruble time deposits is im-
portant from the viewpoint of mitigating the in-
flationary consequences of money supply growth.
The rate of growth in foreign currency de-
posits, the other component of Quasi-money, was
quite considerable and stood at 7.9% in the first
quarter, or slightly lower than in the same period
last year. However, annualised growth in ruble
time deposits was considerably faster than in for-
eign currency deposits (growth in foreign cur-
rency deposits, calculated as month on month of
the previous year, slowed to 20.3% as of April 1,
2006, from 36.6% a year earlier).
The persisting instability of economic
agents’ asset currency preferences and the corre-
sponding fluctuations in demand for the national
and foreign currency, which cause rubles and for-
eign exchange to flow back and forth, are among
the factors that determine, along with changes in
the official ruble exchange rate, the dynamics of
the monetary aggregates. The slowing of the an-
nual rates of growth in the ruble aggregates was
a weakly expressed trend in the first quarter (less
than 1 percentage point), whereas the slowing of
growth in the broader monetary aggregates, in-
cluding the aggregate that comprises foreign cur-
rency cash, was more considerable (about 2 per-
centage points). At the same time, the rates of
growth in all the aggregates at the end of 2006
Q1 were higher than a year earlier.
The ratio of dollarisation, that is, the share
of the foreign currency component in the money
supply in the monetary survey definition (M2X),
was actually unchanged in the first quarter and
stood at 16.6% as of April 1, 2006 (16.3% as of
January 1, 2006). In the same period of 2005, the
ratio of dollarisation increased by 1 percentage
point to 18.6%. At the same time, the ruble com-
ponent of Quasi-money continued to predomi-
nate in the M2X broad aggregate, accounting for
31.3% as of April 1, 2006, as against 29.4% a year
earlier.
Growth in the non-cash component of the
broad monetary aggregate, that is, growth in en-
terprise and household sector funds attracted by
23 2006 Q1
Quantitative and Qualitative Monetary Indicators
banks in rubles and foreign currency (36% as of
April 1, 2006, on April 1, 2005), which serve as the
basis for the increase of lending, was slower than
the expansion of credit to the real sector (an
annualised 42% as of April 1, 2006). At the same
time, growth in banking sector claims on the
non-financial sector (almost 393 billion rubles)
in the first quarter of 2006 was considerably faster
than in the first quarter of 2005 but slower than
in the previous quarter largely due to seasonal
trends. Therefore, the importance of credit to
non-financial enterprises and households as a
source of growth in the aggregate money supply
increased considerably in the first quarter of 2006
year on year. However, growth in the banking
sector’s net foreign assets, which exceeded the
indicators of both the fourth and the first quar-
ters of 2005, remained the main source of money
supply expansion in the period under review.
The broad monetary base contracted 6.6%
in 2006 Q1 as a whole (5.5% in 2005). The share
of funds in credit institutions’ correspondent ac-
counts with the Bank of Russia contracted from
17.5% to 11.8% in January-March 2006 (from
20.2% to 14.3% in the same period last year). The
share of credit institutions’ funds immobilised by
the Bank of Russia by taking banks’ funds on de-
posit and conducting operations with Bank of
Russia bonds (OBR) rose from 1.7% to 6.2% of
the monetary base over the quarter and with credit
institutions’ required reserves from 7.2% to 12.5%.
The large-scale increase in the general
government deposits, caused by the expansion
of the Stabilisation Fund, had a serious restrain-
ing effect on money supply growth in the first
quarter of 2006. World oil prices remained high in
2006 Q1 and led to a considerable increase in the
Stabilisation Fund, which totalled 1,677.4 billion
rubles as of April 1, 2006. The Stabilisation Fund
accounted for 58.8% of the value of the
government’s deposits with the Bank of Russia as
of April 1, 2006 (43.7% a year earlier) and for more
than a half of the broad monetary base. Given that
high world oil prices registered in 2006 Q1 remain
at this level throughout the year, the average
monthly growth of the Stabilisation Fund may
slightly exceed the respective 2005 average
monthly growth, even despite the increase in the
cut-off price, above which oil revenues are saved
into the Stabilisation Fund.
At the same time, surplus oil revenue pay-
ments into the Stabilisation Fund declined by more
than one-third in February and March compared
with the previous two months. This can testify to
the Stabilisation Fund’s reduced immobilising
function after the cut-off price has been changed
from $20 to $27 per barrel.
2006 Q1
Statistical Addendum
Consumer prices by group of goods and services
(month on month, %)
Monthly inflation Core inflation Food price growth
Growth in food
prices net of
vegetable prices
Vegetable and
fruit price growth
Non-food price
growth
Service price
growth
January 1.8 0.9 1.6 1.3 5.5 0.5 4.1
February 1.0 0.8 1.1 1.1 1.5 0.4 1.6
March 0.8 0.7 1.1 0.9 2.8 0.4 0.6
April 1.0 0.8 0.8 1.0 -0.6 0.6 2.0
May 0.7 0.6 0.4 0.5 -0.7 0.8 1.4
June 0.8 0.5 0.8 0.4 4.8 0.7 0.9
July 0.9 0.8 1.0 1.0 1.5 0.6 1.3
August 0.4 0.7 0.1 0.8 -6.3 0.5 1.0
September 0.4 0.9 0.0 0.9 -9.0 0.9 0.6
October 1.1 1.3 1.4 1.7 -2.7 0.7 1.2
November 1.1 1.1 1.5 1.5 2.2 0.7 0.8
December 1.1 1.0 1.7 1.4 5.4 0.4 1.0
Full year (December on
December)
11.7 10.5 12.3 13.1 3.3 7.4 17.7
January 2.6 0.9 1.4 1.1 5.1 0.4 8.8
February 1.2 0.7 1.4 0.9 6.1 0.4 2.2
March 1.3 0.8 2.1 1.1 11.2 0.4 1.2
April 1.1 0.9 1.7 1.3 5.4 0.5 0.8
May 0.8 0.6 1.1 0.7 4.1 0.4 0.8
June 0.6 0.5 0.7 0.4 3.3 0.3 0.9
July 0.5 0.5 0.3 0.5 -1.8 0.4 0.9
August -0.1 0.5 -1.0 0.5 -12.9 0.5 0.8
September 0.3 0.8 -0.7 0.6 -11.6 1.1 0.9
October 0.6 0.7 0.4 0.6 -2.4 0.7 0.7
November 0.7 0.6 0.9 0.6 4.5 0.6 0.6
December 0.8 0.6 1.1 0.6 5.6 0.5 0.8
Full year (December on
December)
10.9 8.3 9.6 9.1 14.3 6.4 21.0
January 2.4 0.8 2.0 1.0 11.3 0.4 6.2
February 1.7 1.2 3.0 1.9 12.6 0.5 1.0
March 0.8 0.7 1.2 0.9 3.2 0.4 0.7
25 2006 Q1
Statistical Addendum
Consumer prices by group of goods and services
(since start of year on accrual basis, %)
Monthly inflation Core inflation Food price growth
Growth in food
prices net of
vegetable prices
Vegetable and
fruit price growth
Non-food price
growth
Service price
growth
January 1.8 0.9 1.6 1.3 5.5 0.5 4.1
February 2.8 1.7 2.8 2.3 7.1 0.9 5.8
March 3.5 2.4 3.8 3.2 10.1 1.4 6.4
April 4.6 3.2 4.7 4.2 9.5 2.0 8.5
May 5.3 3.8 5.2 4.8 8.7 2.8 10.0
June 6.1 4.3 6.0 5.2 13.9 3.4 11.0
July 7.1 5.1 7.1 6.2 15.6 4.0 12.5
August 7.6 5.8 7.2 7.1 8.3 4.6 13.6
September 8.0 6.8 7.2 8.0 -1.4 5.5 14.3
October 9.3 8.1 8.7 9.9 -4.0 6.3 15.7
November 10.5 9.3 10.4 11.5 -1.9 7.0 16.6
December 11.7 10.5 12.3 3.3 7.4 17.7
January 2.6 0.9 1.4 1.1 5.1 0.4 8.8
February 3.9 1.7 2.8 2.0 11.5 0.7 11.2
March 5.3 2.4 4.9 3.1 24.0 1.1 12.6
April 6.5 3.3 6.7 4.4 30.8 1.6 13.5
May 7.3 4.0 7.9 5.1 36.1 2.1 14.4
June 8.0 4.4 8.6 5.5 40.6 2.4 15.4
July 8.5 5.0 8.9 6.1 38.0 2.8 16.5
August 8.3 5.5 7.8 6.6 20.2 3.4 17.4
September 8.6 6.3 7.1 7.2 6.2 4.5 18.5
October 9.2 7.1 7.5 7.8 3.6 5.2 19.3
November 10.0 7.7 8.4 8.4 8.3 5.9 20.0
December 10.9 8.3 9.6 9.1 14.3 6.4 21.0
January 2.4 0.8 2.0 1.0 11.3 0.4 6.2
February 4.1 2.0 5.0 2.9 25.3 0.9 7.2
March 5.0 2.8 6.2 3.9 29.3 1.3 8.0
2006 Q1
Consumer prices by group of goods and services
(month on month of previous year, %)
Inflation over
period Core inflation* Food price
growth*
Growth in food
prices net of
vegetable prices*
Vegetable and
fruit price growth
Non-food price
growth*
Service price
growth*
January 11.3 11.0 9.2 11.7 -10.7 8.6 21.9
February 10.6 10.8 9.2 12.0 -12.9 8.0 18.9
March 10.3 10.8 9.2 12.2 -13.8 7.6 17.5
April 10.2 11.0 9.1 12.7 -17.8 7.6 17.8
May 10.2 11.0 8.9 12.9 -20.4 7.8 17.7
June 10.1 10.9 8.8 12.6 -18.4 7.9 17.4
July 10.4 11.0 9.5 12.9 -15.7 8.0 16.7
August 11.3 10.9 11.1 12.9 -4.6 8.0 17.0
September 11.4 10.7 11.3 12.7 -2.2 8.1 16.8
October 11.5 10.5 11.7 12.7 0.9 7.8 17.3
November 11.7 10.4 12.0 12.9 2.0 7.6 17.7
December 11.7 10.5 12.3 13.1 3.3 7.4 17.7
January 12.7 10.4 12.1 12.9 3.0 7.3 23.1
February 13.0 10.4 12.4 12.6 7.6 7.2 23.8
March 13.6 10.5 13.5 12.9 16.4 7.1 24.6
April 13.8 10.6 14.5 13.2 23.4 7.0 23.1
May 13.8 10.6 15.2 13.3 29.3 6.6 22.4
June 13.7 10.6 15.1 13.4 27.5 6.3 22.4
July 13.2 10.3 14.2 12.9 23.4 6.2 21.9
August 12.5 10.1 12.9 12.5 14.7 6.1 21.6
September 12.3 10.0 12.1 12.1 11.3 6.3 22.0
October 11.7 9.4 11.0 10.9 11.6 6.3 21.4
November 11.3 8.9 10.3 9.9 14.1 6.3 21.2
December 10.9 8.3 9.6 9.1 14.3 6.4 21.0
January 10.7 8.2 10.2 9.1 21.1 6.5 18.1
February 11.2 8.7 11.9 10.1 28.4 6.6 16.7
March 10.6 8.7 10.9 10.0 19.2 6.7 16.1
* Bank of Russia estimate.
27 2006 Q1
Statistical Addendum
Inflation growth structure (percentage points)
Inflation growth over period since start of year due to price changes
by group of goods and services
Foodstuffs* Non-food
products Paid services Vegetables and
fruit
Inflation over
period, % Core inflation Non-core
inflation**
January 0.6 0.2 0.8 0.2 1.8 0.8 1.0
February 1.1 0.3 1.1 0.3 2.8 1.4 1.4
March 1.5 0.4 1.2 0.4 3.5 2.0 1.6
April 2.0 0.6 1.5 0.4 4.6 2.6 1.9
May 2.2 0.8 1.8 0.4 5.3 3.1 2.2
June 2.4 1.0 2.0 0.6 6.1 3.5 2.6
July 2.9 1.2 2.3 0.7 7.1 4.2 2.9
August 3.3 1.4 2.5 0.4 7.6 4.7 2.8
September 3.8 1.7 2.6 -0.1 8.0 5.5 2.5
October 4.6 1.9 2.9 -0.2 9.3 6.6 2.7
November 5.4 2.1 3.0 -0.1 10.5 7.6 2.9
December 6.1 2.3 3.2 0.1 11.7 8.5 3.3
January 0.4 0.1 1.8 0.2 2.6 0.7 1.9
February 0.8 0.2 2.3 0.5 3.9 1.3 2.6
March 1.3 0.4 2.6 1.0 5.3 1.9 3.3
April 1.9 0.5 2.8 1.3 6.5 2.7 3.8
May 2.1 0.7 3.0 1.5 7.3 3.1 4.1
June 2.3 0.8 3.2 1.7 8.0 3.5 4.5
July 2.5 0.9 3.4 1.6 8.5 3.9 4.5
August 2.8 1.1 3.6 0.8 8.3 4.4 4.0
September 3.0 1.5 3.9 0.3 8.6 5.0 3.6
October 3.3 1.7 4.0 0.1 9.2 5.6 3.6
November 3.6 1.9 4.2 0.3 10.0 6.1 3.9
December 3.8 2.1 4.4 0.6 10.9 6.6 4.3
January 0.4 0.2 1.5 0.4 2.4 0.6 1.8
February 1.1 0.3 1.7 1.0 4.1 1.5 2.6
March 1.5 0.5 1.9 1.2 5.0 2.1 2.9
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in calculation of core consumer price index.
2006 Q1
Monthly inflation growth due to price changes by group
of goods and services
Foodstuffs* Non-food
products Paid services Vegetables and
fruit
Inflation over
period, % Core inflation Non-core
inflation**
January 0.6 0.2 0.8 0.2 1.8 0.8 1.0
February 0.5 0.1 0.3 0.1 1.0 0.6 0.4
March 0.4 0.1 0.1 0.1 0.8 0.6 0.2
April 0.4 0.2 0.4 0.0 1.0 0.6 0.3
May 0.2 0.2 0.3 0.0 0.7 0.5 0.2
June 0.2 0.2 0.2 0.2 0.8 0.4 0.4
July 0.4 0.2 0.3 0.1 0.9 0.6 0.3
August 0.4 0.2 0.2 -0.3 0.4 0.5 -0.1
September 0.4 0.3 0.1 -0.4 0.4 0.7 -0.3
October 0.8 0.2 0.2 -0.1 1.1 1.0 0.2
November 0.7 0.2 0.2 0.1 1.1 0.9 0.2
December 0.6 0.1 0.2 0.2 1.1 0.8 0.3
January 0.4 0.1 1.8 0.2 2.6 0.7 1.9
February 0.4 0.1 0.5 0.3 1.2 0.6 0.7
March 0.5 0.1 0.3 0.5 1.3 0.6 0.7
April 0.5 0.2 0.2 0.3 1.1 0.7 0.4
May 0.3 0.1 0.2 0.2 0.8 0.5 0.3
June 0.2 0.1 0.2 0.2 0.6 0.4 0.3
July 0.2 0.1 0.2 -0.1 0.5 0.4 0.1
August 0.2 0.2 0.2 -0.6 -0.1 0.4 -0.5
September 0.2 0.4 0.2 -0.6 0.3 0.6 -0.4
October 0.3 0.2 0.2 -0.1 0.6 0.5 0.0
November 0.2 0.2 0.1 0.2 0.7 0.5 0.3
December 0.3 0.1 0.2 0.2 0.8 0.4 0.4
January 0.4 0.2 1.5 0.4 2.4 0.6 1.8
February 0.7 0.2 0.2 0.5 1.7 0.9 0.7
March 0.4 0.1 0.2 0.2 0.8 0.6 0.3
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in calculation of core consumer price index.
29 2006 Q1
Statistical Addendum
Contribution to Inflation Growth (%)
Contribution to inflation growth over period since start
of year by group of goods and services
Foodstuffs* Non-food products Paid services Vegetables and fruit Core inflation Non-core inflation**
January 33.8 8.6 43.5 14.0 43.2 56.8
February 40.0 10.2 38.3 11.5 50.0 50.0
March 42.9 11.7 32.8 12.7 55.3 44.7
April 43.5 13.3 34.0 9.2 57.5 42.5
May 42.4 15.9 34.4 7.3 58.5 41.5
June 39.8 17.2 32.9 10.1 57.2 42.8
July 40.9 17.3 32.1 9.8 58.8 41.2
August 43.8 18.4 32.8 4.9 62.6 37.4
September 47.0 21.1 32.7 -0.8 68.4 31.6
October 50.2 20.8 31.0 -1.9 70.9 29.1
November 51.5 20.4 28.9 -0.8 72.0 28.0
December 52.1 19.2 27.5 1.2 72.0 28.0
January 17.0 4.8 70.2 8.0 27.1 72.9
February 21.2 6.2 60.4 12.1 33.4 66.6
March 24.5 6.8 50.0 18.7 36.7 63.3
April 28.6 8.1 43.8 19.5 41.1 58.9
May 29.3 9.2 41.2 20.2 43.1 56.9
June 29.0 9.8 40.5 20.8 44.1 55.9
July 30.1 10.9 40.7 18.3 46.5 53.5
August 33.2 13.2 43.6 9.9 52.3 47.7
September 35.1 17.1 44.9 3.0 58.3 41.7
October 35.9 18.6 43.9 1.6 60.9 39.1
November 35.6 19.2 41.8 3.4 61.1 38.9
December 35.2 19.2 40.3 5.4 60.5 39.5
January 16.0 6.1 59.5 18.3 24.5 75.5
February 27.2 7.7 40.9 24.1 37.2 62.8
March 30.1 9.1 37.6 23.2 42.4 57.6
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in calculation of core consumer price index.
2006 Q1
Contribution to monthly inflation growth by group
of goods and services
Foodstuffs* Non-food products Paid services Vegetables and fruit Core inflation Non-core inflation**
January 33.8 8.6 43.5 14.0 43.2 56.8
February 50.7 13.1 29.1 7.1 61.8 38.2
March 52.8 17.0 13.3 16.9 74.2 25.8
April 45.7 19.0 38.2 -2.9 65.1 34.9
May 35.7 32.6 36.6 -4.9 64.9 35.1
June 22.1 25.8 23.1 29.1 48.2 51.8
July 47.5 17.6 27.3 7.5 68.1 31.9
August 89.6 37.7 44.9 -72.2 122.3 -22.3
September 100.3 67.0 30.2 -97.5 164.9 -64.9
October 70.5 18.9 20.3 -9.7 86.8 13.2
November 60.7 18.0 13.8 7.5 79.4 20.6
December 55.8 9.0 15.5 19.7 71.7 28.3
January 17.0 4.8 70.2 8.0 27.1 72.9
February 30.0 9.2 40.0 20.8 46.5 53.5
March 33.6 8.4 20.9 37.0 46.1 53.9
April 46.7 14.1 15.8 23.4 60.9 39.1
May 34.9 18.4 20.6 26.1 60.1 39.9
June 25.7 15.5 32.1 26.6 54.6 45.4
July 48.4 29.6 43.6 -21.6 86.0 14.0
August estimate can't be made for negative value
September 92.7 141.5 83.9 -218.1 243.9 -143.9
October 47.2 40.9 29.7 -17.8 96.4 3.6
November 31.6 26.1 18.2 24.1 63.1 36.9
December 31.0 18.8 22.1 28.1 53.5 46.5
January 16.0 6.1 59.5 18.3 24.5 75.5
February 43.4 10.0 14.0 32.6 55.8 44.2
March 43.9 15.8 21.6 18.7 67.5 32.5
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in calculation of core consumer price index.
31 2006 Q1
Statistical Addendum
Major monetary indicators in 2005-2006
1.01.05 1.02.05 1.03.05 1.04.05 1.07.05 1.10.05 1.01.06 1.02.06 1.03.06 1.04.06
Cash (M0), billion rubles 1,534.8 1,425.2 1,444.1 1,481.7 1,650.7 1,740.7 2,009.2 1,875.6 1,890.1 1,928.8
monthly rates of growth, % 15.2 -7.1 1.3 2.6 4.3 2.2 13.8 -6.6 0.8 2.0
rates of growth since start of year, % -7.1 -5.9 -3.5 7.6 13.4 30.9 -6.6 -5.9 -4.0
share in M2 structure, % 35.2 34.0 33.5 33.1 33.5 32.9 33.2 32.1 31.9 31.3
Non-cash funds (M2-M0), billion rubles 2,828.5 2,765.1 2,867.3 2,992.9 3,276.7 3,552.1 4,036.3 3,967.3 4,029.6 4,240.6
monthly rates of growth, % 8.5 -2.2 3.7 4.4 5.5 3.5 10.0 -1.7 1.6 5.2
rates of growth since start of year, % -2.2 1.4 5.8 15.8 25.6 42.7 -1.7 -0.2 5.1
M2 monetary aggregate, billion rubles 4,363.3 4,190.3 4,311.4 4,474.6 4,927.4 5,292.8 6,045.6 5,842.9 5,919.6 6,169.4
monthly rates of growth, % 10.7 -4.0 2.9 3.8 5.1 3.1 11.2 -3.4 1.3 4.2
rates of growth since start of year, % -4.0 -1.2 2.6 12.9 21.3 38.6 -3.4 -2.1 2.0
rates of growth (month on month of previous year, %) 35.8 30.4 29.3 30.8 33.6 42.0 38.6 39.4 37.3 37.9
Foreign currency deposits, billion rubles 935.1 993.6 1,033.2 1,024.9 1,090.6 1,167.9 1,178.2 1,194.2 1,238.6 1,225.9
monthly rates of growth, % 0.9 6.3 4.0 -0.8 3.4 1.2 0.6 1.4 3.7 -1.0
rates of growth since start of year, % 6.3 10.5 9.6 16.6 24.9 26.0 1.4 5.1 4.1
share in money supply structure by monetary survey
methodology, % 17.6 19.2 19.3 18.6 18.1 18.1 16.3 17.0 17.3 16.6
Money supply by monetary survey methodology,
billion rubles
5,298.7 5,184.8 5,344.4 5,499.6 6,015.9 6,458.4 7,221.1 7,035.6 7,155.7 7,392.9
monthly rates of growth, % 8.9 -2.2 3.1 2.9 4.8 2.7 9.3 -2.6 1.7 3.3
rates of growth since start of year, % -2.2 0.9 3.8 13.5 21.9 36.3 -2.6 -0.9 2.4
M2 velocity (annualised average) 4.7 4.7 4.6 4.6 4.6 4.5 4.4 4.4 4.3 4.2
change since start of year, % -1.3 -6.1 -4.0
Monetisation (by M2 aggregate), % 21.3 21.4 21.5 21.6 21.9 22.2 22.7 23.0 23.3 23.6
Broad monetary base 2,380.3 2,144.1 2,259.9 2,250.1 2,302.8 2,538.9 2,914.1 2,636.0 2,661.0 2,721.0
monthly rates of growth, % 14.3 -9.9 5.4 -0.4 1.8 5.0 15.3 -9.5 0.9 2.3
rates of growth on accrual basis, % -9.9 -5.1 -5.5 -3.3 6.7 22.4 -9.5 -8.7 -6.6
Multiplier (by broad monetary base) 1.8 2.0 1.9 2.0 2.1 2.1 2.1 2.2 2.2 2.3
change since start of year, % 9.2 6.6 4.1 8.5 16.7 13.7 13.2 6.8 7.2 9.3
2006 Q1
33 2006 Q1
Statistical Addendum
2006 Q1
35 2006 Q1
Statistical Addendum
2006 Q1
37 2006 Q1
Statistical Addendum