CBR Quarterly Inflation Review - Q4 2006
Central bank: cbr | Type: quarterly_review | Date: 2006-12-31

THE CENTRAL BANK
OF THE RUSSIAN FEDERATION
(BANK OF RUSSIA)
Quarterly
Inflation
Review
2006 Q4
Research and Information Department
Introduction........................................................... 1
Inflation Dynamics ................................................... 2
Monetary Conditions .............................................. 13
Statistical Addendum ............................................. 21
Quarterly Inflation Review is placed on Bank of Russia website:

2006 Q4
Inflation Dynamics
Introduction
the main instruments used by the Bank of Russia
to raise funds.
Despite the implementation of the liquidity
absorption measures, the monetary aggregates in
2006 increased more than the projected demand
for money. The M2 aggregate rose more than
40% on an annualised basis in the second half of
2006 and by the end of the year it stood at 48.8%,
whereas broad money expanded 41.4%.
Nevertheless, the pressure of rapid growth
in the monetary aggregates on inflation has been
cushioned in the past few years by the significant
expansion of demand for the national currency
and the lengthening of the lags in the effect of
monetary growth on prices. The increase in the
demand for the national currency was chiefly due
to growth in domestic demand and the continued
withdrawal of the dollar from the Russian
economy. The velocity of money decreased rap-
idly, while the monetisation of the economy in-
creased.
In the second half of 2006, oil prices de-
clined on the world market and in the fourth quar-
ter they were lower than in the same period of
2005.
In the beginning of 2007, the price of oil was
also lower than a year earlier. In this situation the
price of Russian oil in 2007 may be lower than the
one projected when the budget was being com-
piled. Export revenues may be smaller than ex-
pected and the effect of excess liquidity on the
economy and the upward pressure on the ruble
will decrease. In addition, the Bank of Russia will
be able to tighten its policy on the money supply
and this, in the long run, may favourably affect
inflation dynamics.
Consumer price growth continued to slow
down in Russia in 2006. Core inflation was lower
than in 2005 and growth in the prices of goods
and services not included in the calculation of the
core consumer price index decreased. Consumer
prices rose 9.0% in 2006, the smallest increase in
inflation since 1991. Although the reduction of in-
flation in 2006 (by 1.9 percentage points) was
more significant than in the previous two years
(0.8 percentage points and 0.3 percentage
points), the inflation target set for the year (7-
8.5%) was not met. The reduction of inflation on
the consumer goods market in 2006 was largely
due to the slowing of growth in the prices of ser-
vices provided to the public, including those regu-
lated by government.
The Bank of Russia was limited in imple-
menting its monetary policy by the need to con-
tain the ruble’s appreciation for the purpose of
maintaining the competitiveness of Russian goods
on the international and domestic markets.
A large part of aggregate liquidity, which
resulted from significant growth in international
reserves, was absorbed in 2006, as in 2005, by the
Russian Government’s Stabilisation Fund and
settled in the federal government accounts with
the Bank of Russia. At the same time, the rise in
the base price of oil from $20 to $27 per barrel in
the beginning of 2006 reduced the absorption
capacity of the Stabilisation Fund, compelling the
monetary authorities to tighten control over the
money supply.
To reduce the inflationary pressure, the
Bank of Russia raised the interest rates on deposit
operations conducted on standard terms and re-
vised interest rates on auction deposit operations
and operations with Bank of Russia bonds (OBR),
2006 Q4
Consumer price inflation (%)
Growth (December 2006
on December 2005)
Growth (December 2005
on December 2004)
Prices of goods and services, total 9.0 10.9 Slowing of growth
by 1.2 times
of which:
- food prices 8.7 9.6 Slowing of growth
by 1.1 times
- food prices, excluding vegetable and fruit prices 8.5 9.1 Slowing of growth
by 1.1 times
- non-food prices 6.0 6.4 Slowing of growth
by 1.1 times
- paid services provided to public 13.9 21.0 Slowing of growth
by 1.5 times
Prices of goods and services included in core inflation calculation 7.8 8.3 Slowing of growth
by 1.1 times
Source: Rosstat.
Inflation Dynamics
According to Bank of Russia estimates,
growth in the prices of goods and services included
in the calculation of the core consumer price in-
dex accounted for 6.1 percentage points, or 67.1%
of overall price increase on the consumer goods
market (6.6 percentage points, or 60.5% in 2005).
Food prices rose 8.7% in 2006 as against
9.6% in 2005.
Food prices, excluding vegetable and
fruit prices, went up 8.5% in 2006 as against
9.1% in 2005. In the first quarter they increased
3.9%, in the second 0.6%, in the third 2.0% and
in the fourth 1.8%. According to Bank of Russia
estimates, growth in the prices of this group of
Consumer Prices
According to the Federal State Statistics Ser-
vice (Rosstat), consumer prices rose 9.0% in 2006
as against 10.9% in 2005.
In the first quarter of 2006, consumer prices
gained 5.0%, in the second 1.1%, in the third 1.0%
and in the fourth 1.7%. In October consumer prices
were up 0.3%, in November 0.6% and in Decem-
ber 0.8%.
Core inflation stood at 7.8% in 2006 as
against 8.3% in 2005. In the first quarter it was
2.8%, in the second 1.1%, in the third 2.0% and in
the fourth 1.8%. In October core inflation ran at
0.5%, in November 0.6% and in December 0.7%.
2006 Q4
Inflation Dynamics
Food price inflation (%)
Growth (December 2006
on December 2005)
Growth (December 2005
on December 2004)
Food products 8.7 9.6 Slowing of growth by 1.1 times
Bread and bakery products 11.1 3.0 Acceleration of growth by 3.7 times
Cereals and legumes 12.1 0.2 Acceleration of growth by 60.5 times
Pasta 4.7 1.9 Acceleration of growth by 2.5 times
Meat and poultry 5.9 18.6 Slowing of growth by 3.2 times
Fish and seafood 7.8 12.7 Slowing of growth by 1.6 times
Milk and dairy products 8.7 10.5 Acceleration of growth by 1.2 times
Butter 6.8 8.2 Acceleration of growth by 1.2 times
Sunflower oil -1.2 2.1
Granulated sugar 14.9 -0.1
Vegetables and fruit 10.3 14.3 Slowing of growth by 1.4 times
Alcoholic beverages 10.1 7.6 Acceleration of growth by 1.3 times
Source: Rosstat.
goods accounted for 3.3 percentage points, or
36.6% of overall price increase on the consumer
goods market (3.8 percentage points, or 35.2%
in 2005).
Growth in the price of granulated sugar ac-
celerated sharply in the first quarter of 2006 and
reached 48.8%, but since the second quarter it
mostly declined. Overall, in 2006 the price of
granulated sugar rose 14.9%, whereas in 2005 it
fell 0.1%. This growth was due to the reduction
of sugar supply on the domestic market, caused
by the 44% fall in refined sugar imports, 16%
growth in the contract prices of imported refined
sugar and the rise in the domestic producer prices,
caused by the increased price of imported raw
sugar. According to Bank of Russia estimates,
growth in the price of granulated sugar increased
overall consumer price growth by 0.2 percentage
points and core inflation by 0.3 percentage points
(it was negligent in 2005).
Growth in meat and poultry prices slowed
down to 5.9% in 2006 from 18.6% in 2005, largely
due to the fall in poultry prices, which declined
5.3% amid 20.4% growth in output. Beef and
pork prices gained 13.3% and 7.9%, respectively,
in 2006 (as against 23.6% and 18.2% in 2005).
Fish and seafood prices rose 7.8% in 2006,
or 1.6 times less than in 2005.
Grain producer prices increased 29.4% in
2006, whereas in 2005 they fell 14.1%. As a re-
sult, growth accelerated year on year in the prices
of bread and bakery products (to 11.1% as against
3.0%), cereals and legumes (to 12.1% as against
0.2%) and pasta (to 4.7% as against 1.9%). Ac-
cording to Bank of Russia estimates, these price
increases accounted for 0.4 percentage points of
last year’s overall consumer price growth as
against 0.1 percentage points in 2005.
As in the previous three years, food prices,
excluding vegetable and fruit prices, in 2006 grew
faster than non-food prices.
Vegetable and fruit prices rose 10.3% in
2006 (as against 14.3% in 2005), which repre-
sents a slowdown from the 2001-2005 average.
As a result, the general rate of inflation acceler-
ated by an estimated 0.4 percentage points, or
4.6% of overall consumer price growth (0.6 per-
centage points, or 5.4% in 2005).
Non-food prices gained 6.0% in 2006 (as
against 6.4% in 2005). In the first quarter they
increased 1.3%, in the second 1.0%, in the third
1.9% and in the fourth 1.6%.
Petrol prices rose 10.9% as against 15.8% a
year earlier and their growth accounted for an es-
timated 0.2 percentage points of total inflation as
against 0.3 percentage points in 2005.
Prices of paid services provided to the pub-
lic were up 13.9% last year as against 21.0% in
2005. In the first quarter they rose 8.0%, in the
second 1.9%, in the third 1.8% and in the fourth
1.6%.
The significant slowing of service prices, in-
cluding administered prices, contained overall
consumer price growth. The administered service
prices rose 13.7%, according to Bank of Russia
estimates (as against 23.9% in 2005). The amend-
2006 Q4
ments passed 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,’ in 2005 and the Federal Tariff
Service’s Order No. 853-e/4, dated December 29,
2005, set limits on growth in housing and utility
charges for each region and created the mecha-
nism to control their dynamics. As a result, hous-
ing and utility charges increased 17.9% in 2006 as
against 32.7% in 2005.
Passenger transport fares and communica-
tions fees rose 14.2% and 2.1%, respectively, in
2006 as against 15.8% and 9.1% in 2005. Pre-
school tuition fees increased more than other ser-
vice prices (by 28.5% as against 32.1% in 2005).
Service prices in 2006 grew 1.9 times faster
than consumer prices as a whole (in 2005 they
increased 2.6 times faster) and stood at 7.5%.
According to Bank of Russia estimates, the in-
crease in service prices in 2006 accounted for 3.3
percentage points, or 36.3% of overall consumer
price growth (4.4 percentage points, or 40.2% in
2005).
According to Rosstat data, consumer price
growth in 2006 was slower than in 2005 in all fed-
eral districts of Russia.
According to Bank of Russia estimates, the
difference has decreased between the Russian
regions in terms of the price of the fixed set of
goods and services used by Rosstat in monitoring
the purchasing power of the population in the re-
gions. The regional difference ratio
1 in 2006 re-
mained virtually unchanged from 2005 at 45.3%
(in 2005 it stood at 45.8%).
The most significant difference between the
Russian regions was in the rates of growth in veg-
etable and fruit prices. In the Southern Federal
District, for instance, these prices increased 17.3%,
whereas in the Volga District they rose 5.0%. At
the same time, growth in non-food prices and
food prices without vegetable and fruit prices was
approximately the same in all regions.
Although growth in service prices slowed
down significantly in all regions, it was particu-
larly noticeable in the Southern and Far Eastern
Federal Districts (10.2 and 13.6 percentage points,
respectively, as against 7.1 percentage points in
Russia as whole).
According to the Institute for the Economy
in Transition, the inflationary expectations of the
managers of key industrial enterprises somewhat
decreased in 2006 as compared with 2005. Up to
37% of them predicted growth in selling prices in
2006 as against 38% in 2005.
Housing Market Prices
In recent years housing prices have risen
faster than consumer prices. In the period from
2000 through 2005 prices on the primary housing
market had increased 190% and on the second-
ary market 230%, while consumer prices had
grown 150%. In 2006, prices on the primary hous-
ing market rose 47.7% as against 17.5% in 2005,
whereas prices on the secondary housing market
increased 54.4% as against 18.0% a year earlier.
Meanwhile, consumer price inflation slowed down
to 9.0% last year.
Housing price growth accelerated despite
rapid growth in housing construction: in 2006 it
was 115.2% as against 106.1% in 2005. Demand
exceeded supply partly because the tightening of
quality and other requirements for developers had
slowed the completion of housing projects in
2005.
One factor of growth in the demand for
housing was rapid growth in household income:
19.8 million square metres of housing, or 39.5%
of total housing completed in 2006, were built by
occupants at their own expense or on credit. How-
1 The regional difference ratio is calculated as the difference between the price of a fixed set of goods and services in the mo st
expensive and the cheapest regions relative to the national value of the same set.
2006 Q4
Inflation Dynamics
ever, real estate accounts for a small proportion
of total household income used. According to the
household sector balance of income and ex-
penses, in the first nine months of 2006 it stood
at 2.5%.
Continuous growth in housing prices makes
investment in housing extremely profitable. While
a bank deposit carried an interest of 8.2% last year
(this applies to the ruble-denominated household
deposits with terms of up to one year, except de-
mand deposits), investment in housing yielded
more than 47%.
Producer Prices
Producer prices gained 10.4% in 2006 as
against 13.4% in 2005. The slowdown was partly
due to the significant fall in producer prices (by
19.2%) in the mining sector in the fourth quarter
of last year, which was caused by a drop in oil
prices on the world market. Overall growth in pro-
ducer prices in this type of activity in 2006 was
1.6% as against 31% in 2005. At the same time,
fuel and energy producer prices declined 3.6%,
whereas in 2005 they gained 35.3%. Producer
prices in the ore mining sector increased 49.4%
as against 5.6% in 2005. According to Bank of
Russia estimates, the contribution made by pro-
ducer price growth in the mining sector to overall
price growth in 2006 contracted to 0.4 percent-
age points, or 3.5% as against 6.1 percentage
points, or 45.8% in 2005.
Meanwhile, producer price growth in the
manufacturing sector accelerated to 13.3% from
8.1% in 2005. There was a sharp rise in metal prices
(from 5.1% to 26.9%) as non-ferrous metal prices
increased amid growth in world prices.
As for the manufacturing industries whose
output goes to the consumer goods market, price
growth in the production of foodstuffs, includ-
ing beverages, and tobacco accelerated from
4.0% in 2005 to 8.3% in 2006 and in the produc-
tion of leather, leather goods and footwear from
5.6% to 6.6%. In textile and clothing production
price growth slowed from 4.2% to 4.0%.
According to Bank of Russia estimates, as a
result of producer price growth in the sectors ori-
ented to the consumer goods market, core infla-
tion increased by 4.4 percentage points to 56.4%
2006 Q4
of total inflation in 2006 (as against 3.0 percent-
age points, or 36.1% in 2005).
Price growth in the production, transmission
and distribution of electricity stood at 9.8% as
against 11.5% in 2005.
Freight transportation charges rose 32.1%
in 2006 as against 16.6% in 2005, with freight
railway charges going up 8.9% as against 13.3%
a year earlier.
Communication fees for corporate users
increased 1.3% in 2006 as against 2.2% in 2005.
Prices in the construction sector gained
12.4% last year as against 12.1% a year earlier.
Agricultural producer prices were up
10.4% in 2006, whereas in 2005 they increased
3.0%. The main contributor was the crop-grow-
ing sector, where producer prices increased 21.0%
in 2006, whereas in 2005 they fell 6.1%.
Prices of livestock products rose 4.2% in
2006 as against 9.0% in 2005. At the same time,
growth in livestock and poultry prices slowed
down to 3.2% as against 15.2% in 2005.
Inflation in Some Countries of the
World2
US inflation slowed to 2.5% in 2006 (De-
cember on December of previous year) from 3.4%
in 2005. The main contribution to the general level
of consumer prices in the United States in the pe-
riod under review was made by core inflation
(nearly 2.0 percentage points). The changes in the
prices of energy and foodstuffs were far less im-
portant (0.25 percentage points and 0.3 percent-
age points, respectively). Growth in energy prices
slowed to 2.9% from 17.1% in 2005 due to the
energy price downturn in the period from August
through November caused by the fall in the price
of oil on the world market. Motor fuel prices
gained 6.4% in 2006 as against 16.2% in 2005.
The prices of household energy products
4 fell
0.3%, whereas in 2005 they rose 18%. Food prices
gained 2.1% as against 2.3% in 2005. Meanwhile,
growth in sugar prices slowed down and the prices
of milk and dairy products dropped.
US core inflation stood at 2.6% in 2006 as
against 2.2% in 2005. Rent increased 4.2% (as
against 2.6% in 2005), making the biggest con-
tribution to core inflation. Other major factors of
core inflation in the United States were the in-
creased health charges, which rose 4.1% (as
against 4.5% in 2005) and education fees, which
grew 6.3% (as against 6.2% a year earlier).
Eurozone inflation stood at 1.9% in 2006
as against 2.3% in 2005. As is the case with the
United States, the biggest contribution to con-
sumer price growth in the eurozone was made by
core inflation
5 (1.1 percentage points), the small-
est by growth in energy prices (0.3 percentage
points). Energy prices gained 2.9% in 2006 as
against 11.3% in 2005. In the period from Septem-
ber through November 2006 the eurozone saw
energy prices fall. The prices of liquid fuel and lu-
bricants used in transport dropped by 0.8% in
2006, whereas in 2005 they rose 13.6%. Growth
in the prices of energy products used by house-
holds stood at 5.7% as against 11.2% in 2005. In-
crease in the prices of foodstuffs, alcoholic bev-
erages and tobacco contributed half a percentage
point to eurozone inflation. Prices of this group
of products increased 2.7% as against 1.7% a year
earlier. Growth in vegetable and fruit prices, meat
2 According to data compiled by the US Department of Labour Bureau of Labour Statistics, the Statistical Office of the European
Communities (EUROSTAT), China’s National Statistics Bureau and national statistics agencies of other countries. The effect of
various factors on US and eurozone inflation has been calculated by the Bank of Russia.
3 Growth in prices of goods and services included in the consumer goods basket, except foodstuffs and energy products.
4 Fuel oil, boiler fuel, coal, household gas and electricity.
5 Growth in the prices of goods and services included in the consumer goods basket, except foodstuffs, alcoholic beverages,
tobacco and energy products.
2006 Q4
Inflation Dynamics
prices, prices of milk and dairy products, and sugar
prices accelerated.
Eurozone core inflation stood at 1.5% in
2006 as against 1.3% in 2005. Growth in housing
and utility charges and other service prices (ca-
tering, insurance and personal services) made the
biggest contribution to core inflation last year.
Core inflation in 2006 changed little from the pre-
vious year because of the fall in the prices of tele-
communications facilities and communication ser-
vices and the prices of some kinds of household
electrical appliances and electronic gadgets (au-
dio and video players and recorders and personal
computers).
As for the countries that account for a large
portion of Russia’s foreign trade turnover, it
should be noted that in 2006 inflation accelerated
to 6.5% in Hungary (from 3.3% in 2005), 5.1% in
Estonia (3.6%), 4.5% in Lithuania (3%), 11.6% in
Ukraine (10.3%), 6.9% in India (5.6%), 2.8% in
China (1.6%) and 3.0% in Britain (1.9%). Infla-
tion also gathered pace in Kazakhstan, Sweden,
Poland, Slovakia, Turkey and Iran. At the same
time, inflation slowed down to 4.9% in Romania
(from 8.7%), 3.1% in Brazil (5.7%) and 6.6% in
Belarus (8%). Inflation also slowed in Switzerland,
South Korea and the Czech Republic. In Latvia in-
flation remained unchanged from 2005. In Japan
consumer prices rose in 2006, whereas in 2005
they declined, while in Israel consumer prices fell
last year, whereas in 2005 they increased. The big-
gest year-on-year increase in consumer prices in
2006 was registered in Iran (15.9%) and the small-
est in Japan (0.3%).
Foreign Trade Conditions
Prices of Russia’s major export commodities6
in 2006 were mostly higher than in 2005. The most
significant increase was registered in energy and
non-ferrous metal prices. The average price of
Urals crude rose 21% in 2006 year on year (as
against 46% in 2005), petroleum products 19%
(44%), natural gas in Europe 34% (48%) and
non-ferrous metals almost 50% (11%).
However, in 2006 the world market saw
growth in energy prices slow down. Oil and pe-
troleum product prices declined in the period from
August through October as US commercial oil
stocks grew and non-OPEC countries increased
the supply of oil to the world market. In addition,
the oil price downturn was the result of the
weather conditions that caused the reduction of
fuel consumption in North America and Europe
and the lessening of political tension in the world
in the second half of last year. Oil price growth
resumed after OPEC had decided to cut output by
1.2 million barrels per day from November 1, 2006.
6 Average prices have been calculated by the Bank of Russia 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). Natural gas is priced on an average monthly basis; ferrous
metal price indices are published by the World Bank; other goods are priced on an average monthly basis by the IMF.
2006 Q4
As a result, in the third and fourth quarters
of 2006 the average price of Urals was higher than
in the same periods of 2005 by 14% and 5%, re-
spectively, whereas in the first half of 2006 it was
higher by one-third than in the same period of
2005. In December 2006, the price of Urals was
8.6% higher than a year earlier (in December
2005, it was 50% higher than a year earlier).
Petroleum product prices followed the oil
price dynamics by and large. The price of premium
petrol on the European market rose 8.9% in De-
cember 2006 year on year (40% in 2005), diesel
fuel 6.4% (30%) and fuel oil 5.3% (80%). Natu-
ral gas prices in Europe mostly increased in 2006,
but their growth gradually slowed down during the
year and in December 2006 they were 19.1%
higher than a year earlier, whereas in December
2005 they were 50% higher than a year earlier.
Ferrous metal prices continued to fall last
year and in December 2006 they were down 5.5%
on a year earlier (in December 2005, they were
7.7% higher than a year earlier). Meanwhile,
growth in non-ferrous metal prices accelerated
and in December 2006 they were 60% higher than
a year earlier (in December 2005, they were 13.7%
higher than a year earlier). Energy prices in De-
cember 2006 were on average 10.6% higher than
a year earlier (in December 2005, they were
45.4% higher than a year earlier) and non-energy
prices rose 14.5% (as against 11.2% in December
2005).
Food prices on world markets
7 changed both
ways in 2006. The average price of beef was down
2.7% on 2005. Beef prices started to rise in the
second half of last year as Argentina, which ac-
counts for nearly 20% of world meat exports, set
limits on beef exports. Despite the gradual easing
of the beef export restrictions, the quota set by
that country on frozen beef exports in September
2006 was by 30% smaller than a year earlier. In
addition, in line with its long-term plan to cut the
domestic prices of meat products, the Argentine
government issued an order to reduce beef ex-
ports by almost a quarter from December 2006.
As a result, in the fourth quarter of 2006, the
world market price of beef was up 3.4% on the
same period in 2005. In December 2006, the price
of beef rose 5.2% year on year and pork was up
0.5%, whereas poultry prices were down 3.1% (in
December 2005 beef, pork and poultry prices were
down 2.0%, 15.9% and 3.2%, respectively).
The world market price of raw sugar de-
clined in 2006 due to the expectations of a record-
high output in the 2006/2007 season, which, ac-
cording to the World Sugar Organisation, will out-
strip consumption. As a result, in December 2006
the price of raw sugar was down 23% on the same
period a year earlier (in December 2005 it rose
35% year on year).
The bumper raw sugar harvest led to growth
in the production of refined sugar and sugar stocks
increased on the world market. As a result, the
price of refined sugar began to show a downward
trend in the second half of 2006. However, in
December 2006, it was 13.8% higher than a year
earlier (in December 2005, it was 33.5% higher
than a year earlier). The price of refined sugar may
continue to fall as the world market is expected
to experience a surplus of sugar in the 2006/2007
season.
Grain prices rose significantly on the world
market in 2006. The International Grains Council
scaled down the world grain production forecast
for 2006/2007 agricultural year to 1.55 billion
tonnes, a decrease of 42 million tonnes from the
7 Average raw and refined sugar prices have been calculated on the basis of data provided daily by the London Commodity
Exchange. Beef and wheat prices are monthly averages published by the World Bank and pork and poultry prices are monthly
averages published by the IMF.
2006 Q4
Inflation Dynamics
previous agricultural year’s harvest. It also scaled
down its world grain trade and stocks projections.
US wheat export prices rose 24.3% in December
2006 year on year (in December 2005, they in-
creased 6.8%).
As growth in the prices of major export com-
modities exceeded increase in the prices of im-
ports, the terms of Russia’s trade with foreign
countries
8 improved in 2006, but the rise of the
terms of trade index slowed down.
Russia’s trade surplus continued to increase
in 2006 but more slowly because of the slowing
of export growth. In 2006, this country’s trade
surplus expanded 18.9% to $140.7 billion (in 2005,
it rose 37.8% to $118.3 billion).
Foreign Trade in Some Countries of
the World9
The US trade deficit increased by $49.1 bil-
lion in January-November 2006, as compared with
the same period in 2005, due to growth in the
value of imports, especially crude oil. The deficit
in US trade with China accounted for more than a
quarter of the total US trade deficit. The increased
value of energy imports was the principal factor
of growth in the European Union’s aggregate im-
ports. Russian exports accounted for more than a
quarter of growth in EU energy imports. In China,
exports continued to grow faster than imports,
increasing significantly the country’s trade surplus.
Chinese imports of mineral fuel increased, while
steel imports declined. In terms of trade turnover
Russia was China’s 10
th leading trading partner.
Chinese imports of Russian goods slightly ex-
ceeded Chinese exports to Russia. There was a rise
in Russian exports to Belarus, Kazakhstan and
Ukraine.
Demand
Domestic Demand
Russia’s GDP increased 6.7% in 2006 as
against 6.4% in 2005. The country’s economic
development parameters were largely determined
by consumer and investor demand. According to
Bank of Russia estimates, the contribution of do-
mestic demand to GDP growth decreased in 2006
as compared with 2005. At the same time, in
2006, as in 2005, domestic demand for imported
products grew faster than the demand for domes-
tic products. The gap between them grew wider
as compared with the previous year due to more
rapid expansion of imports and this was a factor
that checked growth in domestic production.
Growth in export revenues and the expan-
sion of domestic demand facilitated dynamic
growth in both investment and consumer goods
imports. Meanwhile, imports of investment goods
necessary for economic development grew some-
what faster than imports of consumer goods, ac-
cording to Bank of Russia estimates.
As engineering imports grew faster in 2006
than in 2005, the value of imports increased sig-
nificantly. Compared to 2005, imports of goods
increased 30.8% in 2006, to $163.9 billion (ac-
cording to the balance of payments methodol-
ogy). Rapid rates of growth were registered in
imports
10 from the Asia-Pacific Economic Co-op-
eration member countries, especially the United
States, China, South Korea and other Asian coun-
tries. Imports from the European Union member
countries, including the eurozone countries, rose
virtually at the same rates as imports in general.
Imports from Russia’s other major trading part-
ners grew more slowly, especially imports from CIS
countries.
8 Ratio between export and import price indices.
9 According to the US Department of Commerce Census Bureau, the Statistical Office of the European Communities (EURO-
STAT), the Ministry of Trade of the People’s Republic of China and national statistics agencies of other countries.
10 According to data provided by Russia’s Federal Customs Service.
2006 Q4
and communications, the manufacturing sector
and the mining sector (investments in these sec-
tors accounted for 60.5% of total fixed capital
investment of large and medium-sized enter-
prises). The share of the mining sector in total in-
vestment expanded to 17.3% from 15.2% in 2005,
whereas the share of the manufacturing sector in
fixed capital investment contracted from 17.6%
to 16.4% and the share of transport and commu-
nications decreased from 28.8% to 26.8%.
Investments in machinery, equipment and
transport vehicles accounted for more than a third
of total investment in 2006, as in 2005. About
one- fifth went to purchase imported equipment.
Big investments in machinery and equipment fa-
cilitated the technical retooling of fixed assets and
this represented a major factor of growth in labour
productivity and created conditions for curbing
price growth.
As imports grew much faster than exports,
net exports of goods and services declined by
14.3% in 2006.
External Demand
According to IMF and World Bank esti-
mates11, the world output of goods and services
increased 5.1% in 2006 as against 4.7-4.9% in
2005. According to preliminary data12, in 2006 GDP
grew 3.4% in the United States (as against 3.2%
in 2005), 2.7% in the eurozone (1.4%) and 10.7%
in China (10.2%).
Apart from the expansion of domestic de-
mand, the acceleration of GDP growth in the
eurozone, the United States and China was largely
The share of imported products in the retail
trade commodity resources expanded from 45%
in 2005 to 46% in 2006.
As was the case a year earlier, imports grew
mostly due to the expansion of import volumes.
At the same time, growth in import prices slowed
down from 2005 and this had a favourable effect
on domestic price dynamics.
According to Bank of Russia estimates, do-
mestic demand in 2006 grew faster than at any
time in the past six years, mainly due to the sig-
nificant acceleration of gross capital formation.
Growth in expenditures on final consump-
tion slowed down from 2005 due to the slowing
of growth in household spending. Expenditures on
household sector final consumption increased
10.7% in 2006 as against 12.7% in 2005. Growth
in consumer spending led to increase in sales
through the retail trade network. Retail trade turn-
over expanded 13% in 2006 year on year (as
against 12.8% in 2005) and the value of paid ser-
vices provided to the public increased 8.1% (as
against 6.8% a year earlier).
Growth in expenditures on government sec-
tor final consumption in 2006 was bigger than at
any time in more than a decade. It constituted
4.6% (2.2% in 2005). Nevertheless, the restric-
tive budget expenditure policy and the absorption
of excess money supply by the Stabilisation Fund
contained growth in government sector demand.
Gross capital formation increased 13.2% in
2006 as against 7.2% in 2005. Fixed capital invest-
ment grew 13.5% as against 10.7% a year earlier.
The biggest investments were made in transport
GDP consumption* (growth as % of corresponding period of previous year)
2004 2005 2006
I II III IV full
year I II III IV full
year I II III IV full
year
GDP 7.2 7.9 7.2 6.7 7.2 5.0 5.7 6.6 7.9 6.4 5.5 7.4 6.5 na 6.7
Final consumption 8.0 9.0 9.3 9.2 9.2 6.7 9.5 9.1 8.9 9.7 8.5 9.6 9.5 na 9.0
of which:
- household sector 10.5 11.9 12.1 11.8 12.1 8.7 12.3 11.7 11.4 12.7 10.7 12.0 11.7 na 10.7
Gross capital formation 14.0 13.7 8.6 12.4 12.2 15.0 4.2 13.5 12.2 7.2 13.4 14.6 13.4 na 13.2
Net exports -1.9 -6.6 -12.1 -20.1 -12.2 -10.7 -9.5 -27.2 -10.0 -12.8 -11.7 -12.3 -27.0 na -14.3
- exports 11.2 11.7 11.1 13.0 11.8 3.5 5.6 5.1 10.3 6.4 7.8 5.8 5.2 na 7.0
- imports 20.0 21.3 19.7 25.9 23.3 15.4 14.9 19.4 18.6 17.0 25.7 19.1 20.0 na 20.3
* Quarterly data are to be specified by Rosstat in March 2007.
Source: Rosstat.
11 World Economic Outlook, September 2006, Global Economic Prospects, December 2006.
12 According to data compiled by the US Department of Commerce Bureau of Economic Analysis, the Statistical Office of the
European Communities (EUROSTAT), China’s National Statistics Bureau and national statistics agencies of other countries.
2006 Q4
Inflation Dynamics
the result of growth in exports, which was the
major factor of GDP growth in Japan. The expan-
sion of domestic demand was the major factor of
economic growth in Belarus, Kazakhstan and
Ukraine. At the same time, the United States reg-
istered the slowing of growth in individual con-
sumption and fixed capital investment amid the
reduction of housing construction. Growth in in-
ventories was also a major factor of GDP growth
rates.
Economic growth accelerated in most coun-
tries in 2006. As a result, the world market de-
mand for the major Russian export commodities
increased and the upward trend in the dynamics
of prices of these products continued.
Growth in export prices, especially energy
and non-ferrous metal prices, and the expansion
of export volumes contributed to growth in Rus-
sian exports. Growth in the value of exports was
largely due to the increased export of fuel and
energy products. In 2006 Russian exports grew
25% year on year to $304.5 billion (according to
the balance of payments methodology). Exports
to the European Union member countries, includ-
ing the eurozone, the United States and most of
the other countries that are Russia’s leading trad-
ing partners increased faster than exports in gen-
eral
13. Exports to Asian countries, such as China and
South Korea, increased more slowly than exports
in general. There was a fall in Russian exports to
Iran.
In 2006, as in 2005, most of the increase in
Russia’s GDP was due to the expansion of domes-
tic demand for domestic products, according to
Bank of Russia estimates. At the same time, the
contribution of external demand (exports of
goods and services) to GDP dynamics increased
in 2006 and the acceleration of growth in exter-
nal demand became a factor of GDP growth.
Meanwhile, growth in export prices slowed down.
Supply
The macroeconomic situation in Russia in
2006 was characterised by production growth in
the main types of economic activity. Output in the
key sectors of the economy rose 6.1% as against
5.2% in 2005. The most rapid rates of growth were
registered in some services, especially wholesale
and retail trade, financial activities and communi-
cations.
The industrial output index registered
103.9% in 2006 as against 104.0% in 2005. At the
same time, production growth in the manufactur-
ing sector was by 1.9 times faster than in the min-
ing sector.
Production growth in the mining sector ac-
celerated from 1.3% in 2005 to 2.3% in 2006 and
growth in the production and distribution of elec-
tricity, gas and water accelerated from 1.2% to
4.2%.
Bank of Russia estimates show that in 2006,
as in 2005, most of growth in industry was due to
expansion in the manufacturing sector. However,
although output in many manufacturing industries
grew faster than in 2005, overall production
growth in the manufacturing sector slowed down
from 5.7% to 4.4%. Output grew rapidly in all
major industries turning out products for the con-
sumer goods market. After decline in 2005, out-
put in the textile and clothing industry in 2006 rose
7.3% and the production of leather, leather goods
and footwear increased 16.7%. As for other
manufacturing industries, the most rapid rates of
growth were registered in the production of rub-
ber and plastic goods (11.7%), non-metal mineral
products (10.8%) and metallurgy products
(8.8%). Unlike 2005, last year saw a 5.5% drop
in the output of electric, electronic and optical
equipment (in 2005 it rose 20.7%).
Price dynamics in the economy as a whole
were affected by the changes in the prices of some
goods caused by the changes in the supply of
these goods. Agricultural output increased 2.8%
in 2006 year on year as against 2.4% in 2005. The
gross output of grain rose 0.3% year on year and
sugar beet production increased 39.8%. There
was a rise in the output of the major livestock
products. However, growth in the supply of farm
produce was accompanied by the quickened price
increases caused by significant price growth in
crop farming, especially grain growing, which had
a negative effect on the prices of corresponding
products on the consumer goods market. At the
same time, the output of meat and meat prod-
ucts increased 6.5% year on year (the output of
13 According to data provided by Russia’s Federal Customs Service.
2006 Q4
meat rose 13.3% and poultry 20.4%) and this
growth led to the slowing of growth in meat prices
on the consumer goods market.
Rapid growth in the price of granulated
sugar on the consumer goods market, caused by
a fall in output in January, February, June, July and
August, presented an acute problem in 2006.
Overall, in 2006 sugar production expanded 4.3%
(in the period from December 2005 through De-
cember 2006 sugar production increased 2.5 times
over).
There has been sustained growth in capac-
ity utilisation in recent years. According to the Cen-
tre for Economic Studies, capacity utilisation in
industry stood at 68% in the third quarter of 2006,
which represents an increase of 9 percentage
points on the same period in 2005. The highest
rates of capacity utilisation were registered in the
production of coke and petroleum products
(81%), leather, leather goods and footwear
(78%) and chemicals (77%), the lowest in the pro-
duction of machinery and equipment (57%).
Estimates show that capacity utilisation in
industry in January-September 2006 increased to
66.3% from 51.3% in the same period of 2005.
Taking into consideration the unfavourable age
structure of fixed assets in the Russian economy
(more than half of industrial machinery and equip-
ment have been used for more than 20 years), one
can regard the capacity utilisation level at the end
of 2006 as fairly high. It increases the inflationary
pressure in the economy.
Labour Market
The trend towards growth in the number of
jobholders continued in 2006. Over the year job
numbers increased 0.9% as against 1.3% in 2005.
As output grew faster than employment, labour
productivity increased 5.7%, according to Bank of
Russia estimates, as against 5% in 2005. This
means that the intensive factors of growth re-
mained important, containing price growth in the
economy. In 2006, as a year earlier, labour pro-
ductivity in the manufacturing sector and in the
services increased at approximately the same
rates, according to Bank of Russia estimates. How-
ever, growth in labour productivity in the manu-
facturing sector was mostly due to the fall in job
numbers, whereas in the service sector it was the
result of output growing faster than jobs.
Wage grew rapidly in 2006, faster than
labour productivity. The gap between the rates of
growth in real wage and labour productivity in
2006 widened as compared with 2005, a trend
indicating that prices will go on rising.
Significant wage differences in different
types of activity remained in 2006. The average
monthly wage was the highest in the fuel and en-
ergy sector (27,636 rubles) and the financial busi-
ness (27,794.9 rubles). This is 2.6 times the na-
tional average. The lowest average monthly wage
was in agriculture, hunting and forestry (4,577.7
rubles), textile and clothing industry (4,859.8
rubles) and the production of leather, leather
goods and footwear (5,643.3 rubles). These ac-
count for 43%, 45% and 53% of the national av-
erage, respectively. It should be noted that low
wages were paid in the sectors that were largely
financed from the federal budget (education,
community amenities, public and individual ser-
vices, healthcare and social services).
The number of jobless, calculated accord-
ing to ILO methodology, continued to decline in
2006 year on year and stood at 4.9% as against
6.3% a year earlier. The total number of unem-
ployed in 2006 stood at 7.2% of the economically
active population (as against 7.6% in 2005), the
lowest level since the 1998 financial crisis.
2006 Q4
Inflation Dynamics
Monetary Conditions
The ruble/euro dynamics on the domestic
forex market in the fourth quarter of 2006
matched the euro/dollar dynamics on world mar-
kets. The ruble fell 0.3% against the euro in nomi-
nal terms in the fourth quarter (in the second it
was down 1.0% and in the third 0.1%). At the
same time, in October the ruble gained 0.6%
against the euro, but in November it lost 0.9% and
in December 1.5%. Since the start of last year, the
nominal rate of the ruble against the euro fell
1.7%, whereas in 2005 it rose 9.3%.
In the fourth quarter the real rate of the
ruble against the dollar and the euro appreciated
2.8% and 0.7%, respectively, while the real ef-
fective rate of the ruble against the foreign cur-
rencies dropped 0.1% quarter on quarter. Since the
beginning of 2006, the ruble gained 16.7% against
the dollar and 5.6% against the euro in real terms,
while its real effective rate against the foreign
currencies rose 7.4%.
Russia’s international reserves increased by
$37.5 billion, or 14%, in the fourth quarter of 2006
and since the beginning of 2006 they grew by
$121.5 billion, or 67%, and as of January 1, 2007,
reached $303.7 billion. In 2005, Russia’s interna-
tional reserves expanded by $57.7 billion, or 46%.
The international currency market regis-
Exchange Rate
High energy prices in the world brought
about a massive inflow of foreign currency earn-
ings and led to the expansion of Russia’s interna-
tional reserves in the fourth quarter of 2006. The
changes in the ruble/dollar and ruble/euro ex-
change rates followed the dollar/euro dynamics
on international markets. The Bank of Russia re-
mained the net buyer of foreign currency on the
domestic forex market as it conducted transac-
tions aimed at cushioning the ruble fluctuations
against the bi-currency basket used by the Bank
of Russia as an operational benchmark in its ex-
change rate policy. In the fourth quarter of 2006
the composition of this basket remained un-
changed (0.6 dollars and 0.4 euros).
The ruble mostly appreciated against the
dollar in 2006. In the fourth quarter the nominal
ruble/dollar rate gained 0.8% quarter on quarter
(in the first 1.9%, in the second 3.5% and in the
third 1.5%). At the same time, in October the ruble
slipped 0.4% against the dollar, for the first time
in 2006, but in November and December it recov-
ered and rose 0.9% and 1.3%, respectively. Since
the beginning of 2006, the nominal ruble/dollar
rate gained 9.6%, whereas in 2005 it fell 3.1%.
2006 Q4
tered the dollar’s depreciation against the major
European and Asian currencies. The decline was
due to US foreign trade imbalances, the Federal
Reserve’s decision to leave US short-term interest
rates unchanged since the middle of 2006, growth
in interest rates in the eurozone, Great Britain and
Japan and the adoption by China of a more flex-
ible exchange rate policy since the middle of 2005.
In 2006, China continued to float the yuan against
a basket of currencies comprising the US dollar and
other currencies of importance for the Chinese
economy. The intraday fluctuations of the yuan
against the US dollar were within ±0.3%. In 2006
(December on December 2005) the US dollar de-
preciated 11.5% against the euro, 12.5% against
the pound sterling, 3.2% against the yuan and
0.8% against the yen
14. The dollar also depreci-
ated against most of the other foreign currencies
of importance for the Russian economy, especially
the Slovak koruna, Romanian leu, Swedish krona,
Czech koruna, Polish zloty, Estonian kroon,
Lithuanian litas, Latvian lat and South Korean won.
Interest Rates
The Bank of Russia in 2006 took steps to
narrow the interest rate band in its operations.
The lowest Bank of Russia interest rate within the
band, set by the interest rate on deposit opera-
tions conducted on standard ‘tom-next’ condi-
tions, in 2006 was raised from 0.5% to 2.25% p.a.
(in the fourth quarter it was raised by 0.25 per-
centage points). The overnight credit rate, the
highest rate within the band, was lowered over
the year from 12% to 11% p.a. (in the fourth quar-
ter it was cut by half a percentage point).
The average weighted yield at the deposit
auctions held in the fourth quarter of 2006 rose
as the Bank of Russia raised the cut-off rates. The
average weighted four-week deposit auction in-
terest rates ranged between 2.95% and 4.50%
p.a. (in the third quarter they ranged between
2.59% and 2.83% p.a.) and three-month rates
varied from 4.03% to 5.11% p.a. (3.80-4.45%
p.a.). The average weighted yield at the Bank of
Russia bond (OBR) auctions held in October, No-
vember and December ranged between 4.14%
and 5.24% p.a. (3.98% and 4.99% p.a. in the
third quarter). The average weighted yield on over-
night repo operations, the major market instru-
ment used to provide liquidity to the banking sec-
tor, varied from 6.01% to 6.47% p.a. (6.00% to
6.19% p.a. in the third quarter). The average
weighted Lombard credit auction interest rate
ranged from 7% to 7.18% p.a. in the fourth quar-
ter (7.1% p.a. in the third).
Interbank interest rates on overnight ruble
loans remained within the Bank of Russia interest
rate band in the fourth quarter of 2006. The
MIACR on overnight ruble loans ranged between
2.17% and 9.82% p.a. in the fourth quarter (1.25%
to 6.67% p.a. in the third). The average MIACR
14 According to data provided by Reuters.
2006 Q4
Monetary Conditions
on overnight ruble loans increased to 5.12% p.a.
in the fourth quarter from 2.60% p.a. in the third.
As the ruble remained relatively stable
against the bi-currency basket in the fourth quar-
ter, financial market participants continued ac-
tively to invest in the ruble-denominated assets.
There was no single trend in the dynamics of in-
terest rates on loans to non-financial enterprises
and households on the Russian financial market.
In the fourth quarter the average interest rate on
short-term loans to non-financial enterprises rose
by 0.1 percentage points to 10.4% p.a., whereas
on long-term loans it fell by 0.4 percentage points
to 12.1% p.a.
The yield curve for loans extended to non-
financial enterprises in the fourth quarter of 2006
rose in all sections except the loans extended for
terms longer than three years, but it became a little
less inclined as the shortest-term interest rates
inched up.
The average interest rate on loans extended
to households for terms of up to one year slipped
by 1.1 percentage points in the fourth quarter as
compared with the third and stood at 18.2% p.a.
The average interest rate on loans extended to
households for terms longer than one year was
down by 0.6 percentage points to 15.5% p.a.
Average interest rates on deposits with
terms of up to one year and from one year to three
years rose in the fourth quarter as compared with
the third by 0.1 percentage points and 0.2 percent-
2006 Q4
age points, respectively, and both stood at 7.7%
p.a. As in the period from January through Sep-
tember, deposits with terms of six months to one
year carried the highest interest.
Yields tended to decline on the federal loan
bond (OFZ) market in the fourth quarter, except
the permanent-income OFZ-PD segment. As of
the end of the quarter the effective OFZ market
portfolio index registered 6.57% p.a., a decrease
of 0.1 percentage points from the previous quar-
ter. The average quarterly effective OFZ market
portfolio index shed 0.15 percentage points and
stood at 6.67% p.a.
The OFZ yield curve remained ascending in
the fourth quarter, but its incline decreased as the
yield on OFZ bonds with terms of up to four years
rose and the yield on longer-term OFZ bonds fell.
The volatility of price indicators for most of
the ruble-denominated financial instruments re-
mained moderate and their interest rate structure
by term was relatively balanced. The yield curves
for the key financial instruments moved down a
little but remained ascending. They became
slightly less inclined as short-term interest rates
inched up.
International financial markets in 2006
were affected by the tightening of the monetary
policy by the central banks of the world’s leading
industrialised nations and major emerging mar-
kets, which was necessitated by the increased
danger of inflation at the current stage of the
world’s cyclic economic recovery. The factors of
accelerated inflation in the conditions of economic
growth and increased employment were growth
in unit wage costs and the expansion of demand
for goods and services amid the diminished capa-
bilities for increasing their supply through the
utilisation of unused production capacity.
In the first half of 2006, the US Federal Re-
serve raised four times the federal funds rate:
from 4.25% to 4.5% p.a. in January, to 4.75% p.a.
in March, to 5% p.a. in May and to 5.25% p.a. in
June. In the period from June 2004 to June 2006
the benchmark federal funds rate had increased
by 4.25 percentage points. Growth in US short-
term interest rates contained core inflation. In the
2006 Q4
Monetary Conditions
middle of 2006, the Federal Reserve switched to
the policy of leaving the benchmark federal funds
rate unchanged as signs of an economic slow-
down appeared in the United States, especially in
housing construction.
The European Central Bank (ECB) raised the
refinance rate in December 2005 from 2% to
2.25% p.a., in March 2006 to 2.5% p.a., in May
to 2.75% p.a., in August to 3% p.a., in October to
3.25% p.a. and in December to 3.5% p.a.
In the eurozone, consumer price inflation in
the period from June 2005 through August 2006
topped 2% (month on corresponding month of
previous year), exceeding the medium-term tar-
get set by the ECB. In the period from September
through December 2006 eurozone inflation was
less than 2% due to the fall in energy prices.
The LIBOR on US dollar deposits with matu-
rity periods from one month to one year rose by
0.5-1 percentage points in 2006 (December on
December 2005); the LIBOR on similar deposits
denominated in the euro increased by 1-1.1 per-
centage points
15. The yield on US government se-
curities with maturity periods from two to ten
years rose by 0.1-0.3 percentage points, while the
yield on similar financial assets in the eurozone
gained 0.4-0.9 percentage points. The LIBOR on
US dollar deposits with all terms and the yield on
US treasuries with all maturities in September 2006
were higher than the LIBOR on the euro-denomi-
nated deposits and the yield on eurozone govern-
ment securities. The US benchmark federal funds
rate has exceeded the ECB’s refinance rate since
December 2004 (since December 13, 2006, the
difference has been 1.75 percentage points and
the biggest difference in the period since Decem-
ber 2004 was 2.5 percentage points).
Money
The M2 monetary aggregate increased
16% in the fourth quarter of 2006, exceeding with
seasonal regularity its growth in the previous quar-
ter (9.4%). On an annualised basis (against the
same date a year earlier) M2 growth accelerated
from 46.6% as of October 1, 2006, to 48.8% as
of January 1, 2007.
As a result, actual M2 growth surpassed the
revised projection of growth in the demand for
rubles in 2006 (36-39%). At the same time, de-
spite rapid growth in the money supply, inflation
continued to slow down, largely due to acceler-
ated economic growth and the expansion of de-
mand for the national currency. The inflationary
consequences of monetary growth were also miti-
gated by the fact that the expansion of the ruble
supply was accompanied by the significant reduc-
tion of the velocity of money. In the fourth quar-
ter of 2006 the velocity of money, measured by
the M2 aggregate, decreased 6.0% as against
1.6% in the same period of 2005. Overall, in 2006
the velocity of money decreased 14% as against
6.5% a year earlier. In 2006 the velocity of money
declined more rapidly than in 2005 due to the
structural changes in the money supply and the
15 According to data provided by Reuters.
2006 Q4
significant reduction of demand for foreign ex-
change.
The ‘Money’ aggregate in the monetary
survey definition, which comprises the most liq-
uid transactional components of the money sup-
ply, reflects the economic situation and liquidity
preferences. In the fourth quarter of 2006, these
funds grew 15.3% as against 14.4% in the same
period of 2005. On an annualised basis (against
the same data a year earlier) the ‘Money’ aggre-
gate increased from 44% as of October 1, 2006,
to 45.1% as of January 1, 2007. This was the result
of growth in both cash and non-cash (funds in
accounts and demand deposits) components of
this aggregate (in the period from October
through December the latter increased slightly less
than cash). Cash expanded 38.6% in 2006, an in-
crease of 7.7 percentage points on a year earlier.
Demand deposits increased 52% in 2006, which
represents a growth of 11 percentage points on
2005.
The non-cash component of the ‘Money’
aggregate is mostly comprised of corporate sec-
tor funds and its growth largely reflects the in-
creased demand of economic agents for money
for the purpose of conducting transactions. The
share of corporate sector funds contracted from
79.4% in 2005 to 77.7% in 2006.
Following the seasonal pattern of changes
of the past few years, cash in the fourth quarter
of 2006 increased more than in the third (by 16%
as against 7.5%) and more than in the fourth
2006 Q4
Monetary Conditions
quarter of 2005 (15.4%). As a result, M0 grew
38.6% in 2006 as against 30.9% in 2005 and its
growth was smaller than that of M2.
The dynamics of household sector demand
for foreign exchange had a major effect on the
changes in the monetary aggregate M0. As the
ruble appreciated against the dollar and the euro,
net sales of foreign exchange to households
through the exchange offices decreased by more
than half in 2006 as compared with 2005.
Cash accounted for 31% of M2 as of Janu-
ary 1, 2007, a contraction of 2.3 percentage points,
which somewhat made up for the impact of over-
all money supply growth on inflation.
The aggregate ‘Quasi-money’ comprises
less liquid components of the money supply, used
by economic agents as savings. In the fourth quar-
ter of 2006, it increased by 12.6% and in 2006 as
a whole 35.3% (as against 37.2% in 2005).
Growth in ‘Quasi-money’ in October-De-
cember was due to the expansion of the ruble
component: time deposits increased 17.4% in the
fourth quarter and 55.4% in 2006 as a whole
(44.2% in 2005).
The foreign currency component of
‘Quasi-money’ (foreign currency-denominated
deposits) expanded 1.9% in dollar terms in the
fourth quarter of 2006. Foreign currency depos-
its increased 7.2% in 2006, or almost three times
less than in 2005.
One factor of the differences in the dynam-
ics of various monetary aggregates is the back and
2006 Q4
forth movement of rubles and foreign exchange
caused by fluctuations in the demand for the na-
tional and foreign currency. As a result of the fall
in the demand for foreign exchange in 2006 the
monetary aggregate M2 grew more than M2X,
which expanded 40.5% as against 36.3% in 2005.
The dollarisation ratio (the share of the
foreign currency component in the money supply
in the monetary survey definition) decreased in
2006 from 16.3% to 11.4%, or by 4.9 percentage
points (in 2005 it contracted by 1.3 percentage
points). At the same time, the ruble-denominated
time deposits accounted for the largest part of
M2X (33.5% as of January 1, 2007, as against
30.2% as of January 1, 2006).
The non-cash component of the M2X ag-
gregate, that is, funds raised by banks from en-
terprises and households in rubles and foreign
currency, in 2006 grew more slowly (by 41.3%)
than banking sector claims on the non-finan-
cial enterprises and households (47.2%). At the
same time, in the fourth quarter of 2006 these
claims increased considerably more than in the
same period of 2005. Thus, in the fourth quarter
of last year, as in 2006 as a whole, the importance
of banking sector credit to the non-financial en-
terprises and households as a source of aggregate
money supply increased significantly.
The broad monetary base expanded 18.3%
in the fourth quarter of 2006 as against 14.8% in
the same period of 2005. The share of credit in-
stitutions’ funds in correspondent accounts with
the Bank of Russia in the broad monetary base
expanded from 12.7% to 15.5% in the fourth quar-
ter of 2006. The share of credit institutions’ funds
sterilised by the Bank of Russia by deposit taking
and OBR operations contracted in that period from
7.7% to 4.9%, but it was larger than at the end of
2005 (1.4%). The share of tied funds, including
the credit institutions’ required reserves, also de-
creased, from 13.6% to 10.2% (in the fourth quar-
ter of 2005 it contracted by 5 percentage points
to 6.9%).
The massive accumulation of funds in gen-
eral government accounts, caused above all by the
expansion of the Stabilisation Fund, was a major
brake on money supply growth in 2006. High oil
prices in the world in that period led to significant
growth of the Stabilisation Fund, which equalled
2,346.9 billion rubles as of January 1, 2007, as
against 1,237 billion rubles a year earlier.
2006 Q4
Statistical Addendum
Statistical Addendum
Table 1
Consumer prices by group of goods and services
(month on month, %)
Monthly
inflation Core inflation Food price growth Food price
growth*
Vegetable and
fruit price growth
Non-food price
growth
Growth in
non-food prices
excluding petrol
Service price
growth
January 1.8 0.9 1.6 1.3 5.5 0.5 0.5 4.1
February 1.0 0.8 1.1 1.1 1.5 0.4 0.4 1.6
March 0.8 0.7 1.1 0.9 2.8 0.4 0.5 0.6
April 1.0 0.8 0.8 1.0 -0.6 0.6 0.5 2.0
May 0.7 0.6 0.4 0.5 -0.7 0.8 0.6 1.4
June 0.8 0.5 0.8 0.4 4.8 0.7 0.4 0.9
July 0.9 0.8 1.0 1.0 1.5 0.6 0.4 1.3
August 0.4 0.7 0.1 0.8 -6.3 0.5 0.5 1.0
September 0.4 0.9 0.0 0.9 -9.0 0.9 0.6 0.6
October 1.1 1.3 1.4 1.7 -2.7 0.7 0.7 1.2
November 1.1 1.1 1.5 1.5 2.2 0.7 0.5 0.8
December 1.1 1.0 1.7 1.4 5.4 0.4 0.5 1.0
Full year
(December on December)
11.7 10.5 12.3 13.1 3.3 7.4 6.2 17.7
January 2.6 0.9 1.4 1.1 5.1 0.4 0.5 8.8
February 1.2 0.7 1.4 0.9 6.1 0.4 0.4 2.2
March 1.3 0.8 2.1 1.1 11.2 0.4 0.4 1.2
April 1.1 0.9 1.7 1.3 5.4 0.5 0.4 0.8
May 0.8 0.6 1.1 0.7 4.1 0.4 0.4 0.8
June 0.6 0.5 0.7 0.4 3.3 0.3 0.3 0.9
July 0.5 0.5 0.3 0.5 -1.8 0.4 0.4 0.9
August -0.1 0.5 -1.0 0.5 -12.9 0.5 0.4 0.8
September 0.3 0.8 -0.7 0.6 -11.6 1.1 0.8 0.9
October 0.6 0.7 0.4 0.6 -2.4 0.7 0.7 0.7
November 0.7 0.6 0.9 0.6 4.5 0.6 0.6 0.6
December 0.8 0.6 1.1 0.6 5.6 0.5 0.5 0.8
Full year
(December on December) 10.9 8.3 9.6 9.1 14.3 6.4 6.0 21.0
January 2.4 0.8 2.0 1.0 11.3 0.4 0.5 6.2
February 1.7 1.2 3.0 1.9 12.6 0.5 0.5 1.0
March 0.8 0.7 1.2 0.9 3.2 0.4 0.4 0.7
April 0.4 0.4 0.3 0.3 -0.3 0.3 0.3 0.6
May 0.5 0.4 0.5 0.2 2.6 0.4 0.4 0.6
June 0.3 0.3 0.0 0.1 -0.6 0.3 0.3 0.7
July 0.7 0.5 0.9 0.7 2.7 0.4 0.3 0.6
August 0.2 0.6 -0.5 0.7 -10.0 0.8 0.5 0.8
September 0.1 0.8 -0.6 0.6 -11.0 0.8 0.6 0.5
October 0.3 0.5 0.0 0.4 -4.1 0.6 0.7 0.4
November 0.6 0.6 0.8 0.6 2.7 0.6 0.6 0.5
December 0.8 0.7 1.1 0.8 3.6 0.5 0.5 0.7
* Excluding vegetables and fruit.
Note: Tables 1 to 7 are based on Rosstat data and Bank of Russia calculations.
2006 Q4
Table 2
Consumer prices by group of goods and services
(since start of year on accrual basis, %)
Monthly
inflation Core inflation Food price growth Food price
growth*
Vegetable and
fruit price growth
Non-food price
growth
Growth in
non-food prices
excluding petrol
Service price
growth
January 1.8 0.9 1.6 1.3 5.5 0.5 0.5 4.1
February 2.8 1.7 2.8 2.3 7.1 0.9 0.9 5.8
March 3.5 2.4 3.8 3.2 10.1 1.4 1.4 6.4
April 4.6 3.2 4.7 4.2 9.5 2.0 1.9 8.5
May 5.3 3.8 5.2 4.8 8.7 2.8 2.5 10.0
June 6.1 4.3 6.0 5.2 13.9 3.4 2.9 11.0
July 7.1 5.1 7.1 6.2 15.6 4.0 3.3 12.5
August 7.6 5.8 7.2 7.1 8.3 4.6 3.8 13.6
September 8.0 6.8 7.2 8.0 -1.4 5.5 4.4 14.3
October 9.3 8.1 8.7 9.9 -4.0 6.3 5.2 15.7
November 10.5 9.3 10.4 11.5 -1.9 7.0 5.7 16.6
December 11.7 10.5 12.3 13.1 3.3 7.4 6.2 17.7
January 2.6 0.9 1.4 1.1 5.1 0.4 0.5 8.8
February 3.9 1.7 2.8 2.0 11.5 0.7 0.9 11.2
March 5.3 2.4 4.9 3.1 24.0 1.1 1.2 12.6
April 6.5 3.3 6.7 4.4 30.8 1.6 1.6 13.5
May 7.3 4.0 7.9 5.1 36.1 2.1 2.0 14.4
June 8.0 4.4 8.6 5.5 40.6 2.4 2.4 15.4
July 8.5 5.0 8.9 6.1 38.0 2.8 2.8 16.5
August 8.3 5.5 7.8 6.6 20.2 3.4 3.2 17.4
September 8.6 6.3 7.1 7.2 6.2 4.5 4.1 18.5
October 9.2 7.1 7.5 7.8 3.6 5.2 4.8 19.3
November 10.0 7.7 8.4 8.4 8.3 5.9 5.5 20.0
December 10.9 8.3 9.6 9.1 14.3 6.4 6.0 21.0
January 2.4 0.8 2.0 1.0 11.3 0.4 0.5 6.2
February 4.1 2.0 5.0 2.9 25.3 0.9 0.9 7.2
March 5.0 2.8 6.2 3.9 29.3 1.3 1.3 8.0
April 5.4 3.2 6.5 4.2 28.9 1.6 1.6 8.6
May 5.9 3.6 7.0 4.4 32.3 2.0 2.0 9.3
June 6.2 3.9 7.0 4.5 31.5 2.3 2.3 10.0
July 6.9 4.5 8.0 5.2 35.0 2.7 2.7 10.7
August 7.1 5.1 7.4 6.0 21.6 3.5 3.2 11.5
September 7.2 5.9 6.7 6.6 8.2 4.3 3.8 12.0
October 7.5 6.5 6.7 7.0 3.7 5.0 4.5 12.5
November 8.2 7.1 7.5 7.6 6.5 5.5 5.2 13.0
December 9.0 7.8 8.7 8.5 10.3 6.0 5.7 13.9
* Excluding vegetables and fruit.
2006 Q4
Statistical Addendum
Table 3
Consumer prices by group of goods and services
(month on corresponding month of previous year, %)
Monthly
inflation Core inflation Food price growth Food price
growth*
Vegetable and
fruit price growth
Non-food price
growth
Growth in
non-food prices
excluding petrol
Service price
growth
January 11.3 11.0 9.2 11.7 -10.7 8.6 8.4 21.9
February 10.6 10.8 9.2 12.0 -12.9 8.0 8.0 18.9
March 10.3 10.8 9.2 12.2 -13.8 7.6 7.7 17.5
April 10.2 11.0 9.1 12.7 -17.8 7.6 7.5 17.8
May 10.2 11.0 8.9 12.9 -20.4 7.8 7.4 17.7
June 10.1 10.9 8.8 12.6 -18.4 7.9 7.2 17.4
July 10.4 11.0 9.5 12.9 -15.7 8.0 7.1 16.7
August 11.3 10.9 11.1 12.9 -4.6 8.0 7.1 17.0
September 11.4 10.7 11.3 12.7 -2.2 8.1 6.9 16.8
October 11.5 10.5 11.7 12.7 0.9 7.8 6.7 17.3
November 11.7 10.4 12.0 12.9 2.0 7.6 6.3 17.7
December 11.7 10.5 12.3 13.1 3.3 7.4 6.2 17.7
January 12.7 10.4 12.1 12.9 3.0 7.3 6.2 23.1
February 13.0 10.4 12.4 12.6 7.6 7.2 6.2 23.8
March 13.6 10.5 13.5 12.9 16.4 7.1 6.1 24.6
April 13.8 10.6 14.5 13.2 23.4 7.0 6.0 23.1
May 13.8 10.6 15.2 13.3 29.3 6.6 5.8 22.4
June 13.7 10.6 15.1 13.4 27.5 6.3 5.7 22.4
July 13.2 10.3 14.2 12.9 23.4 6.2 5.7 21.9
August 12.5 10.1 12.9 12.5 14.7 6.1 5.7 21.6
September 12.3 10.0 12.1 12.1 11.3 6.3 5.9 22.0
October 11.7 9.4 11.0 10.9 11.6 6.3 5.9 21.4
November 11.3 8.9 10.3 9.9 14.1 6.3 6.1 21.2
December 10.9 8.3 9.6 9.1 14.3 6.4 6.1 21.0
January 10.7 8.2 10.2 9.1 21.1 6.5 6.0 18.1
February 11.2 8.7 11.9 10.1 28.4 6.6 6.1 16.7
March 10.6 8.7 10.9 10.0 19.2 6.7 6.1 16.1
April 9.8 8.2 9.4 9.0 12.7 6.4 6.0 15.9
May 9.4 7.9 8.7 8.5 11.1 6.4 6.0 15.6
June 9.0 7.8 8.0 8.1 7.0 6.4 6.0 15.3
July 9.3 7.8 8.7 8.3 11.9 6.3 5.9 15.0
August 9.6 7.9 9.2 8.5 15.6 6.6 6.0 15.0
September 9.5 7.9 9.3 8.5 16.4 6.2 5.8 14.5
October 9.2 7.8 8.8 8.3 14.4 6.1 5.7 14.1
November 9.0 7.8 8.7 8.3 12.4 6.0 5.7 13.9
December 9.0 7.8 8.7 8.5 10.3 6.0 5.7 13.9
* Excluding vegetables and fruit.
2006 Q4
Table 4
Inflation growth over period since start of year due to price changes
by group of goods and services (percentage points)
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
April 1.6 0.6 2.0 1.1 5.4 2.5 2.9
May 1.7 0.7 2.2 1.3 5.9 2.7 3.1
June 1.8 0.8 2.4 1.2 6.2 3.0 3.2
July 2.0 0.9 2.5 1.4 6.9 3.4 3.5
August 2.3 1.2 2.7 0.9 7.1 3.9 3.2
September 2.6 1.5 2.9 0.3 7.2 4.6 2.6
October 2.7 1.7 3.0 0.1 7.5 5.0 2.5
November 3.0 1.9 3.1 0.3 8.2 5.5 2.7
December 3.3 2.0 3.3 0.4 9.0 6.1 3.0
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in calculation of core consumer price index.
2006 Q4
Statistical Addendum
Table 5
Monthly inflation growth due to price changes
by group of goods and services (percentage points)
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
April 0.1 0.1 0.1 0.0 0.4 0.3 0.0
May 0.1 0.1 0.1 0.1 0.5 0.3 0.2
June 0.0 0.1 0.2 0.0 0.3 0.2 0.1
July 0.3 0.1 0.2 0.1 0.7 0.4 0.3
August 0.3 0.2 0.2 -0.5 0.2 0.5 -0.3
September 0.2 0.3 0.1 -0.5 0.1 0.6 -0.5
October 0.1 0.2 0.1 -0.2 0.3 0.4 -0.1
November 0.2 0.2 0.1 0.1 0.6 0.5 0.2
December 0.3 0.1 0.2 0.1 0.8 0.5 0.3
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in calculation of core consumer price index.
2006 Q4
Table 6
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
April 30.5 10.3 37.9 21.3 45.7 54.3
May 29.3 11.8 37.2 21.8 46.7 53.3
June 28.6 12.9 38.3 20.2 48.4 51.6
July 29.6 13.5 36.7 20.2 49.7 50.3
August 32.7 16.8 38.5 12.1 55.4 44.6
September 35.7 20.2 39.6 4.5 63.4 36.6
October 36.3 22.4 39.4 2.0 66.7 33.3
November 36.2 22.9 37.7 3.2 67.3 32.7
December 36.6 22.6 36.3 4.6 67.1 32.9
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in calculation of core consumer price index.
2006 Q4
Statistical Addendum
Table 7
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
April 35.8 27.0 41.3 -4.2 90.9 9.1
May 16.1 27.6 29.9 26.4 57.3 42.7
June 15.3 34.9 59.7 -10.0 81.6 18.4
July 37.6 19.0 23.4 20.0 60.9 39.1
August 140.5 132.4 97.9 -270.7 249.5 -149.5
September 269.8 290.1 128.8 -588.7 678.9 -578.9
October 51.0 73.9 34.6 -59.5 145.8 -45.8
November 35.6 29.6 17.8 17.0 74.1 25.9
December 39.5 18.9 23.2 18.4 64.4 35.6
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in calculation of core consumer price index.
2006 Q4
Table 8
Economic growth and inflation in Russia’s major trading partners in 2001-2006
2001 2002 2003 2004 2005 2006
GDP growth (reporting year as % of previous year)
Eurozone 1.9 0.9 0.8 2.0 1.4 2.4-2.6*
China 8.3 9.1 9.0 10.1 10.2 10.7**
Ukraine 9.2 5.2 9.6 12.1 2.7 7.0
Belarus 4.7 5.0 7.0 11.4 9.4 9.9
Turkey -7.5 7.9 5.8 8.9 7.4 6.0-6.1*
Poland 1.1 1.4 3.8 5.3 3.5 5.1-5.4*
Switzerland 1.0 0.3 -0.2 2.3 1.9 2.7-3.0***
United Kingdom 2.4 2.1 2.7 3.3 1.9 2.7
United States 0.8 1.6 2.5 3.9 3.2 3.4
Kazakhstan 13.5 9.8 9.2 9.6 9.5 10.6
Japan 0.2 0.3 1.4 2.7 1.9 2.8-2.9*
Inflation (December of reporting year as % of December of previous year)
Eurozone 2.0 2.4 2.0 2.3 2.3 1.9
China -0.3 -0.4 3.2 2.4 1.6 2.8**
Ukraine 6.1 -0.6 8.2 12.3 10.3 11.6
Belarus 46.1 34.8 25.4 14.4 8.0 6.6
Turkey 68.5 29.7 18.4 9.3 7.7 9.7
Poland 3.6 0.7 1.7 4.4 0.7 1.4
Switzerland 0.3 0.8 0.6 1.3 1.0 0.6
United Kingdom 1.1 1.7 1.2 1.6 1.9 3.0
United States 1.6 2.4 1.9 3.3 3.4 2.5
Kazakhstan 6.4 6.6 6.8 6.7 7.5 8.4
Japan -1.2 -0.3 -0.4 0.2 -0.4 0.3
* Estimated by the OECD (November 2006) and World Bank (December 2006).
** Reported by China’s National Statistics Bureau on January 25, 2007.
*** Estimated by the Commission of the European Communities (October 2006) and OECD (November 2006).
2006 Q4
Statistical Addendum
Table 9
Russia’s key macroeconomic and financial indicators
Year Q1 Q2 Q3 Q4
Macroeconomic indicators
GDP
over period since start of year, billion rubles
2004 3,481 7,424 12,028 17,048
2005 4,400 9,429 15,285 21,615
2006 5,722 12,065 19,289 26,621
as % of corresponding period of previous year
2004 107.2 107.5 107.5 107.2
2005 105.0 105.4 105.8 106.4
2006 105.5 106.5 106.5 106.7
as % of corresponding quarter of previous year
2004 107.2 107.9 107.2 106.7
2005 105.0 105.7 106.6 107.9
2006 105.5 107.4 106.5
Industrial output indices
as % of corresponding quarter of previous year
2004 108.3 108.7 109.2 107.1
2005 103.2 103.6 104.1 104.9
2006 103.0 106.0 103.8 103.0
as % of corresponding period of previous year
2004 108.3 108.5 108.7 108.3
2005 103.2 103.4 103.6 104.0
2006 103.0 104.4 104.2 103.9
Agricultural output
as % of corresponding quarter of previous year
2004 99.6 100.2 105.0 102.8
2005 100.3 101.2 103.8 101.4
2006 101.3 101.0 100.6 109.5
as % of corresponding period of previous year
2004 99.6 100.8 103.2 103.1
2005 100.3 100.9 102.7 102.4
2006 101.3 101.1 100.8 102.8
Fixed capital investment
over period since start of year, billion rubles
2004 423.9 1,027.3 1,801.3 2,804.8
2005 526.5 1,282.2 2,262.2 3,534.0
2006 624.3 1,582.7 2,812.8 4,482.7
as % of corresponding quarter of previous year
2004 114.0 113.0 110.9 110.5
2005 108.0 109.6 111.0 112.4
2006 106.1 114.1 112.9 116.8
Retail trade turnover
over period since start of year, billion rubles
2004 1,237.2 2,559.3 3,989.5 5,641.8
2005 1,510.5 3,184.6 4,980.7 7,038.3
2006 1,841.5 3,884.9 6,099.3 8,627.5
as % of corresponding quarter of previous year
2004 111.7 112.9 113.6 114.8
2005 110.5 113.8 113.2 113.4
2006 110.6 112.3 114.2 114.5
Federal budget on accrual
basis, as of end of period
revenue
billion rubles
2004 688.6 1,538.7 2,425.0 3,428.9
2005 1,196.4 2,386.4 3,681.7 5,127.2
2006 1,399.1 2,938.1 4,561.0 6,276.3
as % of GDP
2004 19.8 20.7 20.2 20.1
2005 27.2 25.3 24.1 23.7
2006 24.5 24.4 23.7 23.6
expenditure
billion rubles
2004 553.9 1,184.6 1,837.0 2,698.9
2005 671.1 1,444.2 2,519.7 3,514.3
2006 823.2 1,854.7 2,866.5 4,281.3
as % of GDP
2004 15.9 16.0 15.3 15.8
2005 15.3 15.3 16.5 16.2
2006 14.4 15.4 14.9 16.1
Federal budget surplus on accrual basis, as of end of period
billion rubles
2004 134.7 354.1 588.0 730.0
2005 525.3 942.2 1,162.0 1,612.9
2006 575.9 1,083.4 1,694.5 1,995.0
as % of GDP
2004 3.9 4.7 4.9 4.3
2005 11.9 10.0 7.6 7.5
2006 10.1 9.0 8.8 7.5
Note. Table 9 has been compiled on the basis of data collected by the Bank of Russia, Federal State Statistics Service and Federal
Treasury reported data. Full-year GDP estimate is given without quarterly data adjustment. Beginning from April 2006, pursuant
to Bank of Russia Ordinance No. 1660-U, dated February 17, 2006, interest rates on lending and deposit operations conducted by
banks include data reported by bank branches.
2006 Q4
Table 9 (continued)
Year Q1 Q2 Q3 Q4
Socio-economic indicators
Nominal imputed average
monthly per employee wage
rubles
2004 6,173 6,650 6,930 7,582
2005 7,638 8,234 8,674 9,651
2006 9,397 10,401 10,949 12,224
as % of corresponding quarter of previous year
2004 127.3 125.0 123.7 117.5
2005 122.6 122.4 123.9 126.2
2006 122.3 125.1 125.1 125.6
as % of corresponding period of previous year
2004 127.3 126.1 125.2 122.6
2005 122.6 122.4 123.0 126.9
2006 122.3 123.7 124.1 124.5
Real imputed average monthly
per employee wage
as % of corresponding quarter of previous year
2004 115.0 113.5 111.4 105.2
2005 108.4 107.6 110.0 113.4
2006 110.3 114.3 114.3 115.2
Household money income per capita monthly average, rubles
2004 5,532.8 5,971.3 6,352.8 7,720.5
2005 6,539.5 7,707.3 8,064.7 9,697.7
2006 8,025.7 9,806.4 10,087.6 11,722.9
Household real disposable
money income
as % of corresponding quarter of previous year
2004 113.0 108.4 109.5 110.8
2005 105.1 114.1 112.7 111.9
2006 106.8 113.2 111.4 108.6
as % of corresponding period of previous year
2004 113.0 110.1 109.7 109.9
2005 105.1 109.8 110.8 111.1
2006 106.8 110.2 110.6 110.0
Household spending as % of
income
purchase of goods and services
2004 70.6 70.3 71.9 67.4
2005 73.6 70.1 71.9 67.2
2006 73.9 67.9 71.4 68.7
compulsory payments
2004 8.8 9.3 9.6 8.8
2005 8.4 8.8 9.6 9.6
2006 11.4 11.0 11.6 11.2
growth in savings
2004 15.0 10.0 7.9 11.3
2005 13.1 10.3 9.5 9.4
2006 10.7 9.7 7.3 9.7
purchase of foreign exchange
2004 5.7 8.1 10.9 8.0
2005 7.6 8.0 9.1 9.2
2006 7.6 7.0 7.3 7.4
cash on hand
2004 -0.1 2.3 -0.3 4.5
2005 -2.7 2.8 -0.1 4.6
2006 -3.6 4.4 2.4 3.0
Average imputed pension total, rubles
2004 1,764 1,889 1,979 2,026
2005 2,125 2,324 2,467 2,540
2006 2,539 2,727 2,800 2,839
Real imputed pension
as % of corresponding quarter
of previous year
2004 107.0 106.6 104.8 103.8
2005 106.6 108.2 110.6 112.6
2006 107.8 107.2 103.7 102.5
as % of corresponding period of
previous year
2004 107.0 106.8 106.1 105.5
2005 106.6 107.4 108.5 109.6
2006 107.8 107.5 106.1 105.1
Total number of unemployed (according to ILO methodology)
million
2004 6.7 5.7 5.5 6.0
2005 6.0 5.5 5.4 5.6
2006 5.8 5.5 5.4 5.0
as % of economically active
population
2004 9.2 7.8 7.5 8.2
2005 8.2 7.4 7.3 7.5
2006 7.9 7.5 6.6 6.8
2006 Q4
Statistical Addendum
Table 9 (continued)
Year Q1 Q2 Q3 Q4
Foreign economic activities
Price of Urals crude
over period since start of year, $/barrel
2004 29.4 31.1 33.3 34.6
2005 43.1 45.4 49.3 50.4
2006 57.7 61.1 62.5 60.9
as % of corresponding period of previous year
2004 99.1 115.3 123.1 126.8
2005 146.4 146.1 148.2 145.6
2006 134.0 134.7 126.7 120.9
Commodity exports
over period since start of year, $ billion
2004 37.3 80.5 128.9 183.2
2005 50.2 109.8 174.6 243.6
2006 67.4 144.0 224.0 304.5
as % of corresponding period of previous year
2004 120.0 128.1 131.9 134.8
2005 134.6 136.4 135.4 132.9
2006 134.2 131.2 128.3 125.0
Commodity imports
over period since start of year, $ billion
2004 19.9 42.9 67.9 97.4
2005 25.7 55.1 87.5 125.3
2006 31.6 69.8 112.6 163.9
as % of corresponding period of previous year
2004 124.6 125.5 126.2 128.0
2005 128.8 128.4 129.0 128.7
2006 123.1 126.7 128.6 130.8
Current account (over period since start of year), $ billion
2004 12.7 26.1 41.1 59.0
2005 20.0 42.0 61.7 83.3
2006 29.5 54.4 78.0 95.6*
Private sector net outflow (inflow) of foreign capital (over period since start of year), $ billion
2004 -4.1 -10.2 -17.0 -8.4
2005 1.9 -3.1 5.3 1.1
2006 -4.7 15.1 27.8 41.6
Foreign investment in non-financial sector of
the Russian economy (according to Rosstat
data)
over period since start of year, $ billion
2004 6.2 19.0 29.1 40.5
2005 6.0 16.5 26.8 53.7
2006 8.8 23.4 35.3
as % of corresponding period of previous year
2004 98.5 149.9 139.4 136.4
2005 97.6 86.9 92.1 132.4
2006 146.0 141.9 131.7
of which
direct
total, $ billion
2004 1.5 3.4 5.6 9.4
2005 1.9 4.5 6.6 13.1
2006 3.8 6.4 10.3
as % of corresponding period of previous year
2004 142.8 135.3 119.8 138.9
2005 130.0 131.0 118.1 138.8
2006 200.0 143.6 155.5
portfolio
total, $ billion
2004 0.1 0.1 0.2 0.3
2005 0.1 0.2 0.4 0.5
2006 0.2 0.5 0.7
as % of corresponding period of previous year
2004 500.0 340.0 280.0 83.0
2005 89.9 135.2 160.5 136.3
2006 290.0 290.0 182.3
other
total, $ billion
2004 4.6 15.4 23.3 30.8
2005 4.0 11.8 19.9 40.1
2006 4.7 16.5 24.4
as % of corresponding period of previous year
2004 88.3 152.9 144.4 136.6
2005 87.3 76.7 85.2 130.5
2006 117.2 139.1 122.8
Russia’s international reserves (as of end of period), $ billion
2004 83.4 88.2 95.1 124.5
2005 137.4 151.6 159.6 182.2
2006 205.9 250.6 266.2 303.7
Real ruble exchange rate indices (as % of
December of previous year), as of end of
quarter**
ruble vs. dollar
2004 5.1 4.7 5.6 14.0
2005 4.7 3.3 2.3 3.9
2006 6.9 10.0 12.1 16.7
ruble vs. euro
2004 6.1 7.6 7.6 6.0
2005 6.8 14.7 14.2 18.8
2006 6.5 4.9 6.0 5.6
effective rate
2004 4.8 5.0 5.3 4.7
2005 5.1 8.7 8.3 10.5
2006 6.2 7.0 7.9 7.4
2006 Q4
Table 9 (continued)
Year Q1 Q2 Q3 Q4
Financial market indicators
Quarterly average
Overnight interbank credit rate, % p.a.
in rubles
2004 1.6 7.8 3.9 1.4
2005 1.2 3.0 2.3 4.6
2006 3.2 2.8 2.6 5.1
in US dollars
2004 1.3 1.1 1.4 1.9
2005 2.3 2.8 3.3 3.9
2006 4.4 4.8 5.2 5.2
GKO-OFZ yields***, % p.a.
2004 7.1 7.7 7.9 7.8
2005 7.9 8.0 7.7 7.1
2006 6.8 6.9 6.8 6.7
Interest rate on household time deposits,
% p.a.
up to 1 year in rubles
2004 9.5 9.0 9.2 9.6
2005 9.5 8.6 8.5 8.4
2006 8.3 8.0 7.6 7.7
over 1 year in rubles
2004 10.3 9.1 8.4 7.5
2005 8.4 7.9 6.2 6.4
2006 7.6 5.1 5.2 5.4
up to 1 year in US dollars
2004 5.5 5.9 5.5 5.5
2005 5.6 5.7 5.6 5.6
2006 5.6 5.7 5.7 5.9
over 1 year in US dollars
2004 7.2 6.7 6.3 6.0
2005 6.1 5.6 5.8 5.5
2006 6.2 4.7 5.0 5.5
Interest rate on credit to non-financial
enterprises, % p.a.
up to 1 year in rubles
2004 11.7 12.1 11.4 10.5
2005 10.6 10.7 10.3 11.0
2006 10.4 10.8 10.3 10.4
over 1 year in rubles
2004 14.3 13.5 11.5 12.0
2005 13.0 11.7 12.9 12.1
2006 12.7 12.9 12.5 12.1
up to 1 year in US dollars
2004 8.8 7.9 8.2 8.4
2005 7.9 8.6 9.0 8.8
2006 8.6 8.4 8.6 8.5
over 1 year in US dollars
2004 9.9 9.6 9.4 10.2
2005 9.6 9.6 10.4 10.4
2006 10.5 10.2 10.4 10.0
Interest rate on ruble-denominated promissory notes discounted by banks, % p.a.
2004 11.5 12.4 12.9 11.6
2005 10.9 10.6 9.9 10.0
2006 12.9 8.7 9.2 9.7
As of end of quarter
RTS index
2004 752.66 583.32 631.65 614.11
2005 669.07 706.38 1,007.76 1,125.60
2006 1,434.99 1,494.63 1,549.99 1,921.92
Refinance rate, % p.a.
2004 14.0 13.0 13.0 13.0
2005 13.0 13.0 13.0 12.0
2006 12.0 11.5 11.5 11.0
2006 Q4
Statistical Addendum
Table 9 (concluded)
Year 1.01 1.04 1.07 1.10
Monetary indicators
M0, billion rubles
2005 1,534.8 1,481.7 1,650.7 1,740.7
2006 2,009.2 1,928.8 2,233.4 2,400.8
2007 2,785.2
M2, billion rubles
2005 4,363.3 4,474.6 4,927.4 5,292.8
2006 6,045.6 6,169.4 7,092.3 7,757.5
2007 8,995.8
Net foreign assets of monetary authorities and credit institutions, billion rubles
2005 3,210.0 3,753.3 4,379.7 4,405.4
2006 4,867.9 5,433.6 6,221.1 6,281.8
2007 6,906.0
Domestic credit, billion rubles
2005 4,345.6 3,509.6 3,487.7 4,035.2
2006 4,460.8 4,129.4 4,256.1 4,944.1
2007 5,727.7
Money (monetary survey definition), billion rubles
2005 2,848.3 2,859.6 3,144.3 3,371.9
2006 3,858.5 3,855.9 4,479.3 4,856.1
2007 5,598.4
Quasi-money (monetary survey definition), billion rubles
2005 2,450.4 2,640.0 2,871.6 3,086.5
2006 3,362.6 3,537.0 3,825.5 4,041.1
2007 4,548.3
Foreign currency deposits, billion rubles
2005 935.1 1,024.9 1,090.6 1,167.9
2006 1,178.2 1,225.9 1,221.0 1,153.2
2007 1,155.4
Broad monetary base, billion rubles
2005 2,380.3 2,250.1 2,302.8 2,538.9
2006 2,914.1 2,721.0 3,285.9 3,484.2
2007 4,121.6
Balances in correspondent accounts, billion rubles
2005 480.4 320.9 276.7 374.4
2006 508.6 320.0 430.9 443.7
2007 638.1
M2 velocity
annual average
2005 4.7 4.6 4.6 4.5
2006 4.4 4.3 4.2 4.0
2007 3.8
change since start of year, %
2005 -10.0**** -1.6 -3.0 -5.0
2006 -6.5**** -1.7 -4.9 -8.5
2007 -14.0****
Rate of monetisation of the economy (by M2 aggregate), %
2005 21.2 21.5 21.9 22.3
2006 22.7 23.1 23.9 24.8
2007 26.4
Money multiplier
by broad monetary base
2005 1.8 2.0 2.1 2.1
2006 2.1 2.3 2.2 2.2
2007 2.2
change since start of year, %
2005 9.2**** 8.5 16.7 13.7
2006 13.2**** 9.3 4.0 7.3
2007 5.2****
Foreign currency exchange rates
rubles per dollar
2005 27.75 27.85 28.63 28.53
2006 28.78 27.70 26.94 26.78
2007 26.33
rubles per euro
2005 37.84 36.03 34.63 34.31
2006 34.19 33.63 34.24 33.98
2007 34.70
* Estimate.
** Appreciation of the ruble (+), depreciation of the ruble (-).
*** GKO-OFZ secondary trade turnover effective indicator.
**** Relative to beginning of previous year.
© The Central Bank of the Russian Federation, 2007
Research and Information Department