CBR Quarterly Inflation Review - Q2 2004
Central bank: cbr | Type: quarterly_review | Date: 2004-06-30

THE CENTRAL BANK
OF THE RUSSIAN FEDERATION
(BANK OF RUSSIA)
Inflation
Review
Second Quarter ♦ ♦ ♦ ♦ ♦ 2004
Research and Information Department
Major Inflation Indicators ................................. 1
Monetary Indicators as a Factor
of Inflation .................................................. 14
Financial Market Indicators of Importance
for Inflation ................................................ 20
Statistical Addendum .................................... 23
Inflation Review
Second Quarter ♦ 2004
According to the Federal Statistics Ser-
vice, consumer prices rose 6.1% in 2004 H1
as against 7.9% in 2003 H1. The last time
consumer prices grew less in the first half
(4.1%) was in 1998.
In 2004 Q2, consumer prices increased
2.5% as against 3.5% in 2004 Q1: in April
they rose 1.0%, in May 0.7% and in June
0.8%. In June 2004, consumer price infla-
tion stood at 10.1% as against 13.9% a year
earlier.
Core inflation stood at 4.3% in the first
half of 2004 as against 4.7% in 2003 H1. In
2004 Q1, growth in the prices of goods in-
cluded in the core inflation calculation
amounted to 2.4% and in 2004 Q2, it was
1.8%.
In June 2004, core inflation accelerated
to 10.9% year on year as against 10.5% in
June 2003. The high rate of inflation regis-
tered during the past two years was largely
due to local volatility rather than any long-
term trend.
A major factor of the slowing of growth
in the prices of goods and services included
in the calculation of core inflation was the
reduction of non-food price increases. In the
meantime, high rates of growth in food
prices, especially bread and bakery product
prices, which soared due to a poor grain
harvest in 2003, had a stimulating effect on
core inflation.
Calculated without taking account of
foodstuffs such as bread and bakery prod-
ucts, pasta and flour, whose prices have
been extremely volatile in recent years, core
inflation in June 2004 increased 3.5% as
compared with December 2003. This means
that it was by 0.8 percentage points slower
than the overall core inflation. In the same
period of 2002, when the situation on the
grain market was better, core inflation with-
out these foodstuffs was by 0.2 percentage
points faster than core inflation calculated
taking these foodstuffs into account.
Estimates show that growth in the
Major Inflation Indicators
Inflation Review
Second Quarter ♦ 2004
Table 1
Inflation rates on the consumer goods market as a whole (%)
Growth in
January-June
Growth in
January-June
Result
Prices of goods and services included in core inflation calculation 4.3 4.7 Retardation
by 1.1 times
of which:
food prices excluding vegetable and fruit prices 5.2 4.4 Acceleration
by 1.2 times
non-food prices 3.4 4.6 Retardation
by 1.4 times
Service prices 11.0 15.6 Retardation
by 1.4 times
of which:
prices of goods and services regulated at federal and regional levels 13.3 18.7 Retardation
by 1.4 times
Vegetable and fruit prices 13.9 33.7 Retardation
by 2.4 times
Russia expects a rise in grain production in
2004. According to the Ministry of Agriculture,
Russia’s gross grain harvest this year may be in the
range of 73 million to 76 million tonnes (in 2003, it
was 67.2 million tonnes), which represents an in-
crease of 9-13% on the previous year.
Possible growth in the country’s gross harvest
is evidenced by data on the harvesting of grain crops,
which proceeds at a faster pace than last year (by
August 1, 2004, farmers had harvested grain from
16.9% of the total area sown to grain crops as against
10.9% in 2003). The average grain yield this year
stands at 32.2 centners per hectare as against 24.6
centners per hectare a year earlier. At the same time,
grain stocks remain inadequate. As of July 1, 2004,
agricultural, procurement and processing enterprises
had a total grain stock of 6.9 million tonnes. As com-
pared with July 1, 2003, grain stocks decreased by
25.8% to 75.9% of the four-year average. Procure-
ment and processing enterprises note the most sig-
nificant reduction in the stocks of food rye (by
58.1%) and rice (73%).
prices of goods and services included in the
calculation of the base consumer price in-
dex, in 2004 H1 accounted for 3.5 percent-
age points, or 57.2%, of overall increment
in consumer goods prices as against 3.8 per-
centage points, or 47.9%, in the same pe-
riod of 2003.
Non-food prices rose 3.4% in 2004 H1
as against 4.6% in 2003 H1. The last time
first-half non-food prices grew less (1.3%)
was in 1998. At the same time, in 2004 Q2,
non-food prices rose faster than in 2004 Q1
(2.1% as against 1.4%). After a slight rise in
2004 Q1 (by 0.6%), in Q2 petrol prices in-
creased at a constantly accelerating pace (in
April they increased 1.9% month on month,
Inflation Review
Second Quarter ♦ 2004
Table 2
Food price inflation (%)
January-June
2004 growth
January-June
2003 growth Result
Bread and bakery products 13.6 11.8 Acceleration
by 1.2 times
Cereals and legumes 7.3 14.5 Retardation
by 2.0 times
Pasta products 10.6 4.1 Acceleration
by 2.6 times
Meat and poultry 6.9 1.1 Acceleration
by 6.3 times
Fish and seafood 2.1 8.9 Retardation
by 4.2 times
Milk and dairy products 1.6 0.5 Acceleration
by 3.2 times
Butter -0.9 0.8 --
Sunflower oil -0.8 2.6 --
Granulated sugar 4.4 3.7 Acceleration
by 1.2 times
Alcoholic beverages 5.4 5.7 Retardation
by 1.1 times
in May 4.6% and in June 6.6%). Such sig-
nificant growth in the price of petrol was
due, to some extent, to high world energy
prices. In the first half, the most significant
increase in non-food prices was registered
in the price of petrol, which went up 14.2%
as against 8.4% in 2003 H1), knitwear
(3.8%) and clothes and underwear (3.3%).
Growth in the prices of most non-food
products in 2004 H1 was smaller than in
2003 H1 and there was a 1.0% fall in the
prices of TV and radio sets.
Estimates show that in the first half of
2004, non-food price increases accounted
for 0.9 percentage points, or 15.3%, of
overall consumer price growth as against 1.3
percentage points, or 16.0%, in 2003 H1.
In 2004 H1, growth in food prices, ex-
cluding vegetable and fruit prices, was
faster than growth in non-food prices.
Food prices as a whole rose 6.0% in
2004 H1 as against 7.4% in 2003 H1; Q1
growth stood at 3.8% and Q2 at 2.1%.
Food price growth, measured with-
out taking account of vegetable and fruit
prices, stood at 5.2% in 2004 H1 as against
4.4% in 2003 H1; Q1 growth was 3.2% and
Q2 1.9%.
In 2004 H1, growth in the prices of this
group of products accounted for 2.6 per-
centage points, or 42.2%, of overall con-
Inflation Review
Second Quarter ♦ 2004
sumer price increase as against 2.2 percent-
age points, or 28.1%, in 2003 H1.
The second quarter saw bread and bak-
ery product price growth slow down (April
growth stood at 2.2%, May 1.2% and June
0.7%), which may be partly due to the ex-
pectations of a better harvest. The area
sown to grain crops that are to be harvested
this year expanded 4.1% as compared to
2003.
However, in 2004 H1 the prices of bread
and bakery products and pasta products
rose more than any other food prices, ex-
cept vegetable and fruit prices (by 13.6%
and 10.6% respectively). Compared to 2003
H1, the prices of bread and bakery products
and pasta products accelerated by 1.2 times
and 2.6 times respectively. This is the result
of a bad grain harvest in Russia and Europe
in 2003 and the increase in selling prices,
which rose 26.4% in 2004 H1 as against
11.3% in 2003 H1 amid the continued scar-
city of grain stocks. At the same time, the
output of bread and bakery products de-
clined 3.6%.
Meat and poultry prices rose 6.9% in
2004 H1 as against 1.1% in 2003 H1, as live-
stock and poultry selling prices increased
10.6% in the first half of the year as against
0.1% in the same period last year.
Growth in the prices of some food-
stuffs slowed as compared with 2003 H1
(growth in fish and seafood prices de-
creased by 4.2 times and cereal and legume
price growth slowed by half). The first half
of the year saw a fall in the price of sun-
flower oil (by 0.8%) and butter (by 0.9%).
Food price dynamics were largely af-
fected by growth in producer prices in the
food industry, which rose 7.2% in 2004 H1
as against 5.0% in 2003 H1, and in agricul-
ture. Selling prices of farm produce in-
creased 9.5% in 2004 H1 as against 1.9% in
2003 H1.
Vegetable and fruit prices grew
13.9% in 2004 H1 as against 33.7% in 2003
H1, the smallest first-half growth in 10 years.
After a fall in April and May (by 0.6% and
0.7% respectively), vegetable and fruit
prices rose 4.8% in June. According to esti-
mates, first-half growth in vegetable and
fruit prices raised the general rate of infla-
tion by 0.7 percentage points, or 11.8%. In
2003 H1, growth in vegetable and fruit
prices pushed consumer prices up by 1.8
percentage points, or 22.2%.
Inflation Review
Second Quarter ♦ 2004
Service prices rose 11.0% in 2004 H1
as against 15.6% in the same period last
year. First-quarter growth stood at 6.4%
and second-quarter 4.4%. The slowdown in
service prices was due to the slowing of
growth in the government-regulated
prices of services provided to the public.
In June 2004, these prices rose by an esti-
mated 13.3%, as compared with December
2003, as against 18.7% a year earlier. Spe-
cial mention should be made of the slowing
of growth in rent and communal amenities
charges.
Communal service charges rose 18.6%
in 2004 H1 as against 23.7% in 2003 H1 and
passenger transport fares increased 10.9%
as against 11% respectively. Growth slowed
in the prices of many services in 2004 H1,
except the prices charged by cultural and
pre-school education establishments, which
grew 8.7% and 12.5% respectively as
against 8.1% and 10.3% in the same period
last year. Communication fees were down
2.3%, the first price downturn in the sector
in 10 years.
The increase in the prices of services
provided to the public in 2004 H1 exceeded
overall growth in the prices of goods, which
stood at 4.9%. Service price increases in
2004 H1 accounted for 1.9 percentage
points, or 30.7%, of overall consumer price
growth as against 2.7 percentage points, or
33.7%, in 2003 H1.
The analysis of the distribution of
goods and services price increases in the
first half of 2001-2004, made on the sam-
pling of more than 400 types of consumer
goods and services without taking account
of their weights in consumer expenses, tes-
tified to constant decline in the average rate
Inflation Review
Second Quarter ♦ 2004
1 Price growth distribution shown in the chart is based on a smoothed histogram, using 20 growth ranges with a width of 2% each.
2 Excluding poultry, sausage and canned meat.
of price growth1. At the same time, this de-
cline differed from year to year.
Compared to 2002 H1, inflation in 2003
H1 slowed as a result of the contraction of
the share of goods and services with a high
rate of price growth. This phenomenon re-
flects the process of evening out of price
dynamics of different groups of goods and
services, which is a sign of macroeconomic
stability. At the same time, the range of in-
crease in the prices of most consumer goods
and services was virtually unchanged in
2003 and the relative stability of the distri-
bution median (5.3% as against 5.6% in
2002) bears this out.
In the first half of the year the situation
changed slightly. Inflation slowed due to the
slowing of growth in the prices of goods and
services in the main growth range, a process
which proved the effectiveness of the re-
duction of inflation, because the price slow-
down affected a wide range of goods and
services.
Closer rates of growth in relative prices
of foodstuffs, non-food products and ser-
vices were a positive inflation development,
although this process has not yet become a
sustained one.
Price growth (the average for a sam-
pling of goods) was the biggest in services
and the smallest in non-food products. At
the same time, price growth medians for the
bulk of food and non-food products did not
differ much.
The statistical analysis of food price
growth indicates that the 2004 H1 decrease
of the sample average was the result of the
slowing of growth in vegetable and fruit
prices.
At the same time, the price growth
range of most food products narrowed as
differences in food price dynamics became
less. On the other hand, products in the price
growth range of 9-12% accounted for a
large part of all food products due to sig-
nificant growth in bread and bakery prod-
uct and pasta prices, caused by the poor
grain harvest in 2003, and the continued
scarcity of grain stocks this year. This price
growth range also included meat products
despite their moderate price dynamics in
2003 H1.
The distribution of non-food price in-
creases is characterised by a prominent
maximum and low dispersion. Conse-
quently, the increases in the prices of most
products in this group stay within a narrow
range. Thus, in 2004 H1, the products whose
prices rose by 0-6% accounted for 81.4%
of the entire range of non-food products.
In the same period last year, the main price
growth range was 2-8% and it accounted
for 80.8% of all goods.
The slowing of growth in the prices of
goods in this group in 2004 H1 was due to
the slowing of growth in the prices of non-
food products in the main growth range. At
the same time, the share of products whose
prices rose by more than 6% remained small
and could not create a reserve for potential
decline in inflation.
The distribution of service price in-
creases in 2004 H1 is characterised by three
local highs. The first is in the 7-9% range and
reflects the price dynamics of most con-
sumer services. The second reflects a rela-
tively slow rate of growth in education fees,
which rose 2.4% in 2004 H1. This year was
different from the previous years in that its
third local high corresponded to the defla-
tion growth range, which included the com-
munication services.
Inflation Review
Second Quarter ♦ 2004
Factors of inflation
Several factors affected consumer
prices in 2004 H1.
World market conditions
World market conditions are essential
not only for output and price dynamics in
various sectors of the economy, but also for
the inflow of foreign currency earnings to
the country’s domestic foreign exchange
market.
The average level of world market prices
of major Russian export commodities, ad-
justed for the structure of Russian exports,
rose 12.1% in 2004 H1 as compared to 2003
H1, according to Bank of Russia estimates.
The price of Urals crude was up 15.3%,
petrol 22.7%, diesel fuel 13%, fuel oil 1.0%
and natural gas in Europe 1.6%. Non-fer-
rous metal prices increased 34% (the price
of aluminium was up 20%, copper 67% and
nickel 63%).
The rising prices of energy products and
other raw materials on the world market and
the gap between domestic and world prices
allow Russian producers to continue to raise
prices on the domestic market.
The favourable price situation on
world commodity markets for Russian
exporters and the expansion of demand for
goods and services exported by Russia led
to a rise in exports and growth in the Rus-
sian trade surplus.
In 2004 H1, Russian exports increased
25.1% year on year to $78.6 billion and im-
ports grew 24.7% to $42.3 billion. Russia’s
trade surplus amounted to $36.3 billion, an
increase of 25.7% on 2003 H1’s $28.9 bil-
lion.
Exports grew as a result of not only price
increases, but also the expansion of export
volumes. The principal contribution to
growth in the value of exports in 2004 H1
was made by oil, ferrous and non-ferrous
metals and machinery, equipment and
transport vehicles. There was also a rise in
exports of petroleum products, natural gas,
chemical raw materials and mineral fertiliser
and timber products. The latest data indi-
cate that the share of energy products in the
total value of exports contracted, while that
of ferrous and non-ferrous metals ex-
panded.
Imports grew largely due to the increase
in the purchases of investment goods, which
grew by about 1.4 times over. The expan-
sion of consumer goods imports by almost
one-quarter was the result of growth in im-
ports of non-food consumer goods and
some foodstuffs.
The terms of trade between Russia
and other countries in 2004 H1 were better
than a year earlier: according to a prelimi-
nary estimate, they improved by 13-14% due
to the accelerated growth in export prices.
According to preliminary data, Russia’s
current account surplus increased by $2.9
billion in 2004 H1 year on year and stood at
$22.6 billion, or 8.8% of GDP as against
10.3% of GDP in 2003 H1. The main factor
Inflation Review
Second Quarter ♦ 2004
of growth was considerable expansion of
exports.
The capital and financial account
deficit (net of the changes in reserve assets)
rose from $900 million in 2003 H1 to $7.8
billion in 2004 H1, according to preliminary
data. The private sector’s net capital out-
flow, measured taking into account illegal
capital flight, increased to $5.5 billion (there
was a net capital inflow of $3.8 billion in
2003 H1).
Net inflow of foreign investments to
the private sector of the Russian economy
increased 7.8% to $16.6 billion in 2004 H1,
according to preliminary balance of pay-
ments data; of this, net inflow of foreign
investments to the non-financial enterprise
sector rose 44% to $17.3 billion. The inflow
of foreign direct investments to the non-fi-
nancial enterprise sector rose by an esti-
mated 34% to $8.6 billion, foreign capital
inflow in the form of credit and loans in-
creased by 19% to $7.4 billion and foreign
capital inflow in the form of portfolio in-
vestments grew to $1.3 billion (there was an
outflow of portfolio investments of $600
million in 2003 H1).
An increased attractiveness of placing
investments abroad was conducive to the
growing outflow of private capital from the
country. According to estimates, in 2004 H1
investments in foreign economies rose by
2.3 times year on year to $19.2 billion.
Dedollarisation of the Russian economy
slowed down. The non-financial enterprise
sector and household savings in foreign cur-
rency decreased in 2004 H1 by an estimated
$2.7 billion as against $3.9 billion in 2003 H1.
Russia’s international reserves ex-
panded by $11.3 billion in 2004 H1 (2003 H1
growth stood at $16.6 billion) and as of July
1, 2004, they amounted to $88.2 billion as
against $64.4 billion as of July 1, 2003. As
of the end of 2004 H1, Russia’s international
reserves were enough to finance imports for
9.4 months as against 8.6 months a year
earlier.
International financial markets
In the first half of the year, the US mon-
etary authorities switched to the policy of
gradually raising interest rates in order to
keep inflation at bay. Britain has pursued a
similar policy since the autumn of 2003.
Short-term interest rates in the Economic
and Monetary Union (EMU) were on aver-
age lower than last year and in Japan they
stayed close to nil. The economic upturn in
the industrialised nations amid budget defi-
cits brought about a rise in yields on me-
dium-term financial assets denominated in
major world currencies. As a result of growth
in yields on US treasury bills in the first half
of the year, the differences in yields on as-
sets denominated in dollars and euros
changed. The yield on the dollar-denomi-
nated US treasury bills with maturity from 2
to 10 years in June exceeded the yield on the
euro-denominated EMU government secu-
rities with the same maturity.
In the first half of the year, the dollar
Inflation Review
Second Quarter ♦ 2004
lost 11% of its value against the euro as com-
pared to the same period in 2003, 13.2%
against the British pound, 9.5% against the
Japanese yen and 6.7% against the Swiss
franc. The dollar’s depreciation in the first
half of the year as compared with the same
period last year was attributable to the de-
preciation of the US currency in 2003 caused
by a large current account deficit and the
US economic authorities’ efforts to use the
weakened dollar as a means of boosting the
competitiveness of US goods and stimulat-
ing business activity and employment. In the
first half of the year, however, currency ex-
change rates began gradually to stabilise as
economic growth in the United States ex-
ceeded that of the eurozone, the yield on
the dollar-denominated financial assets in-
creased and the US Federal Reserve tight-
ened its monetary policy.
The level of share prices on the stock
markets of North America, Europe, Asia and
Latin America rose in the first half of 2004
as compared with the same period last year.
The increase was due to the world economic
upturn and improved corporate profit fore-
casts. The obstacles to more significant
growth in share prices on the world’s stock
markets was the escalation of tension in
Iraq, a rise in terrorist activity in the world,
significant price growth on the world oil
market and the tightening of the monetary
policy in some countries.
Domestic supply and demand
Consumer price inflation in the first half
of the year was accompanied by the
heightened production and investment
activity. Output in the key branches of the
economy rose 7.9% in 2004 H1 compared
to 2003 H1, the highest growth rate in three
years (in 2001 H1 it stood at 5.6%, in 2002
H1 at 3.7% and in 2003 H1 at 7.1%). There
was a rise in output in industry, construc-
tion and transport and retail and wholesale
trade turnovers expanded significantly. At
the same time, there was a decline in agri-
cultural production.
Industrial output grew 7.4% in 2004 H1
as compared to 2003 H1 (2003 H1 growth
stood at 6.8%). Rapid rates of production
growth were registered by investment in-
dustries: 14.9% in machine-building, 8.5%
in the building materials industry, 8.2% in
the fuel sector and 9.1% in the chemical and
petrochemical industry. In the first half of
last year, the most rapid rates of produc-
tion growth were registered in the fuel and
ferrous metallurgy sectors (by 10.0% and
9.5% respectively), machine-building (by
7.6%) and the building materials industry
(5.6%).
Transport’s freight turnover expanded
7.3% in 2004 H1 year on year (2003 H1
growth stood at 7.5%). The freight turnover
of rail transport increased 8.7%, automo-
bile transport 5.5% and pipeline transport
7.8%.
There was a rise in business activity in
the construction branch in the first half of
the year. The volume of construction work
Inflation Review
Second Quarter ♦ 2004
done by contract in 2004 H1 expanded
14.2% year on year (in 2003 H1, it grew
14.3%).
At the same time, agricultural output
decreased 1.2% in 2004 H1 year on year (in
2003 H1, agricultural production contracted
0.3%).
It is important for the analysis of infla-
tion to evaluate potential economic growth
(the output of goods and services), because
production growth at a rate exceeding po-
tential production growth may testify to
excessive demand and the increased infla-
tion pressure on the economy. Potential out-
put of goods and services characterises the
supply side of the economy. The output gap
is the percentage difference between actual
and potential output levels.
Taking into consideration statistical
problems and specifics in the evaluation of
output factors, it is meaningful to use with
regard to the Russian economy the expert
method of determining potential output
and the output gap and its influence on price
dynamics. According to estimates, poten-
tial output growth rates in Russia are cur-
rently faster than actual ones and a nega-
tive output gap leads to the gradual slow-
ing of inflation.
In the first half of the year, investor
and consumer demand continued to
grow rapidly. Fixed capital investment rose
12.6% on the first half of 2003 (2003 H1
growth stood at 11.8%).
Real disposable money income in-
creased 9.8% in 2004 H1, as compared to
the first half of last year (in 2003 H1 it grew
15.6%). In 2004 Q2, real disposable money
income rose 7.2% year on year as against
14.3% a year earlier.
The continued increase in household
income led to growth in consumer expenses,
which rose by an estimated 10.8% in 2004
H1 year on year as against 9.6% in 2003 H1.
At the same time, expenses on goods and
services accounted for a larger percentage
of household income than in 2003 H1, caus-
ing consumer prices to rise.
The situation on the labour market
somewhat improved in the first half of the
year as compared to the first half of last
year. In January-June 2003, the number of
jobs in the Russian economy declined,
whereas in the first half of this year it rose,
while the number of jobless fell (2003 H1
saw a rise in the number of unemployed).
In the first half of the year, 91.5% of the
economically active population were em-
ployed and 8.5% were classified as unem-
ployed, according to the ILO methodology
(91.3% and 8.7% respectively in 2003 H1).
Compared to the first half of last year, job
numbers rose by an estimated 1.2%, while
the total number of unemployed declined
0.5%.
The increase in job numbers led to con-
sumer price growth, but the rise in labour
productivity contained this process.
Exchange rate
The exchange rate policy pursued by the
Bank of Russia continued to play a positive
Inflation Review
Second Quarter ♦ 2004
role in curbing inflation. Although in March-
June 2004 the ruble lost some of its value
against the dollar in nominal terms, in June
the ruble’s nominal rate against the dollar
was 1.4% higher than in December 2003.
The ruble’s nominal rise against the dol-
lar was restrained by growth in the prices of
imported consumer goods and, conse-
quently, their domestically produced ana-
logues. The influence of the exchange rate
dynamics on non-food price dynamics was
stronger than on food price dynamics. Since
domestically produced foodstuffs stand up
well to imports on the Russian market in
terms of both quality and prices, the ex-
change rate dynamics mainly affected pro-
ducer prices in the food industry, which uses
imported raw materials more than any other
Russian industry. As for the price dynamics
of non-food products, which are not par-
ticularly competitive, they were more sus-
ceptible to exchange rate fluctuations.
Imports accounted for 42% of the re-
tail trade in 2004 Q1, a decrease of 2 per-
centage points on 2003 Q1, and 35% of
foodstuffs, which also represents a contrac-
tion by 2 percentage points from 2003 Q1.
Calculations show that the ruble’s
nominal rally against the dollar in the first
half slowed core inflation by 0.3-0.4 per-
centage points.
Costs
Producer price growth accelerated in
industry as industrial output expanded. In
the first half of the year, industrial pro-
ducer price growth exceeded consumer
price growth by 2.9 times (it was 1.5 times
slower in the same period last year). Indus-
trial producer prices rose 17.7% in 2004 H1
as against 5.1% in 2003 H1.
Producer price growth accelerated in
the food industry, from 5.0% in 2003 H1 to
7.2% in 2004 H1. Since this industry’s out-
put goes directly to the consumer goods
market, the acceleration had a negative ef-
fect on consumer price dynamics. In light
industry, producer price growth slowed to
5.4% from 6.0% in 2003 H1. The increased
profitability of large and medium-sized en-
terprises in light industry, registered in 2004
Q1, was a factor of moderate growth in
prices.
Producer price growth also acceler-
ated in the construction branch (from
4.9% in 2003 H1 to 6.2% in 2004 H1), which
was caused by producer price growth in the
machine-building and building materials in-
dustries. In 2004 H1, producer prices in these
industries rose 9.8% and 11.9% respectively
(as against 5.9% and 11.1% in 2003 H1).
Producer price growth accelerated in
agriculture amid production decline in this
branch.
Consumer price inflation was also af-
fected by price dynamics in the cost-cre-
ating industries, which directly influence
enterprises’ costs. Producer prices rose sig-
nificantly in 2004 H1 in the fuel sector (by
34.8%) and electric power industry (by
Inflation Review
Second Quarter ♦ 2004
11.4%) (in 2003 H1, producer prices in the
fuel sector declined 11.0% and in the elec-
tric-power industry they increased 13.0%).
Freight transportation rates rose 8.5% in
2004 H1 as against 11.2% in 2003 H1. Growth
in rail transport fares in 2004 H1 was un-
changed from 2003 H1 at 12.6%.
The average monthly wage stood at
6,411 rubles in 2004 H1 as against 5,048
rubles in the same period last year, a growth
of 26.1%, and in real terms it increased
14.2% against 9.5% in 2003 H1.
As in the previous years, wages differed
significantly from sector to sector. The high-
est wages were, as before, in the fuel and
energy sector and the sphere of finance,
credit and insurance, while the lowest were
in agriculture, sectors that were mostly fi-
nanced by the state (education, culture and
the arts) and light industry.
It should be noted, however, that the
most rapid growth in wages at large and
medium-sized enterprises in the first half of
the year, as compared with the same period
last year, was registered in healthcare,
physical culture and social security, agricul-
ture and culture and the arts. Wage in-
creases in the electric power industry and
fuel sector were a little smaller than in the
social sphere, but they were roughly the
same as in industry as a whole.
Overall, wages rose quite rapidly, ex-
ceeding growth in labour productivity. At
the same time, the gap between wage in-
creases and growth in labour productivity
widened as compared to the first half of
2003, indicating that remuneration was not
linked to performance and could provoke
further growth in prices.
Other factors
Russia continued to run a budget sur-
plus in the first half of 2004, which allowed
the government to cut down on borrowings
on the domestic market and reduce infla-
tion growth.
According to the Finance Ministry, fed-
eral budget revenue stood at 20.6% of the
GDP in 2004 H1, expenditure 15.9% and the
federal budget surplus 4.7% (as against
3.1% in the same period last year).
Relatively low inflationary expecta-
tions were a major factor of the slowing of
price growth. According to the polls con-
ducted by the Russian Government’s Cen-
tre for Economic Studies, the inflationary
Inflation Review
Second Quarter ♦ 2004
expectations of the managers of core indus-
trial enterprises in the first half of the year
were lower than in the first half of 2003.
Imminent growth in selling prices was pre-
dicted in that period by 29-34% of respon-
dents as against 31-35% in 2003 H1.
The rate of utilisation of production
capacity is not unimportant for inflation in
the economy. According to the managers of
core industrial enterprises polled, the aver-
age rate of utilisation of production capac-
ity in 2004 Q2 stood at 58%, an increase of
one percentage point on Q1, and it could
hardly cause inflation to accelerate. There
is a reserve of unused production capacity
at present, which can be put into operation
if demand for Russian staples rises or if new
products are launched.
Inflation Review
Second Quarter ♦ 2004
The second quarter of the year saw the
increase in monetary indicators slow down,
and as a result first-half money supply dy-
namics can be regarded as moderate, tak-
ing into consideration Russia’s rapid eco-
nomic growth rates. In March 2004, the ten-
dency towards the accelerated growth of
the ruble supply (M2 aggregate), registered
since 2003, had stopped and a downward
trend began to emerge: as of July 1, 2004,
the M2 aggregate expanded at an
annualised rate of 40.6% as against 48.5%
a year earlier. Overall, 2004 Q2 growth in
the money supply stood at 7.8% as against
18% in 2003 Q2: in April and May ruble sup-
ply growth rates were markedly slower than
the past few years’ average and in June it
expanded far more than in the pervious
months due to seasonal factors.
This slowing of growth in the ruble sup-
ply will ease its pressure on core inflation by
the end of this year and at the beginning of
next. At the same time, the cumulative ef-
fect of rapid rates of growth in the money
supply, registered during the previous three
quarters, may cause prices to rise in the sec-
ond half of the year.
Inflation had no tendency to increase
in the first half of the year and its dynamics
followed the projected path, by and large,
as demand for money rose due to higher-
than-expected economic growth rates.
However, while overall consumer price
growth slowed down as compared to the
same period last year, the rate of core in-
flation in the 12-month moving period re-
mained virtually unchanged by July. This
situation may be an evidence of potential
pressure exerted by the monetary factor on
the general rate of inflation in the coming
period.
The gap between the M2 and GDP
growth rates, which characterises the part
of monetary growth that exceeds the
amount necessary to finance the increased
volume of transactions, narrowed in Q2 but
Monetary Indicators as a Factor of Inflation
Inflation Review
Second Quarter ♦ 2004
was considerably wider than last year. Ac-
cordingly, if the velocity of money declines
to a level that will balance out money growth
and the objective rise in the demand for
money, core inflation dynamics will slow
down, causing the general consumer price
index to fall.
As the velocity of M2 declined more
than it was expected to judging by its trend
since the beginning of the year, it had a re-
straining effect on price growth. This ex-
plains partly the moderate inflation dynam-
ics.
The slowing of growth in March and in
the second quarter of the year was typical
of the ruble aggregates M1 and M2. The
dynamics of the aggregates that comprise
foreign currency (M2X and the notional
broad aggregate M2Y) were different. The
annual rates of growth of the M2X aggre-
gate, which includes foreign currency de-
posits, also slowed down, but to a consid-
Inflation Review
Second Quarter ♦ 2004
erably lesser extent, from 41.5% as of July
1, 2003, to 35.2% as of July 1, 2004. The
annualised growth path of the M2Y aggre-
gate, which comprises an estimated amount
of foreign exchange in the non-financial
enterprise and household sectors, tended to
rise, but its growth rates as of July 1, 2004,
were slower than in the same period last year
(22.5% as against 24%).
The dynamics of the M1 aggregate,
which includes transactional components of
the money supply, such as cash, household
and non-financial enterprise sector current
and settlement accounts and demand de-
posits, slowed down significantly year on
year, declining in 2004 Q2 from an
annualised 48% to 34%.
The reduction was caused by the slow-
ing of growth of both components of M1.
By July, M0 growth rates were slower than
2003 Q2 rates: 39.2% against 42% on an
annualised basis. However, the expansion of
the share of cash in M1 (from 50.4% as of
July 1, 2003, to 52.4% a year later) indicates
Inflation Review
Second Quarter ♦ 2004
that cash grew more rapidly than non-cash
transactional money. The slowing of the
latter’s growth was more significant: funds
in accounts and demand deposits increased
by an annualised 28.5% as of July 1, 2004,
as against 47.3% a year earlier.
Moderate M0 cash growth in 2004 Q2
did not cause consumer prices to rise.
Overall, in April-June, cash expanded
9.5%, a rate less than half the average sec-
ond-quarter growth rate of the previous five
years. The reduction of M0 growth rates,
uncharacteristic of the second quarter of
this year, was largely due to the recovery and
subsequent growth in the household
sector’s demand for foreign exchange and
the moderate slowing of growth in house-
hold income, which in the second quarter
of the year rose less than in the same period
last year. On the other hand, the fact that
cash continued to account for a larger part
of the money supply indicates that demand
for cash remained amid significant growth
in consumer spending and retail trade turn-
over.
As the nominal rate of the ruble slightly
eased against the dollar in 2004 Q2 and the
situation in the banking sector was volatile
in June, household sector net purchases of
foreign currency rose sharply: in April-June
the household sector bought more than $2.5
billion of foreign currency (household sec-
tor net purchases of foreign currency were
negative in the same period last year) and
this affected the dynamics of cash rubles in
circulation.
Against the backdrop of the downward
trends of cash and transaction accounts, at
the end of 2004 Q2 the rates of growth of
the M1 aggregate (it is similar to the
“money” aggregate in the monetary survey
definition) were slower than those of quasi-
money, the savings component of the broad
money supply M2X (the opposite was true
a year earlier). In the 12-month moving pe-
riod, the “money” aggregate increased
33.1% as of July 1, 2004, as against 45.2%
as of July 1, 2003, while quasi-money grew
37.8% as against 37.2% a year earlier.
The acceleration of growth in the quasi-
money aggregate, which comprises funds
used by economic agents as savings, was the
result of the similar dynamics of the ruble
and foreign currency components. At the
same time, in the second quarter, unlike the
preceding period, foreign currency depos-
Inflation Review
Second Quarter ♦ 2004
its grew faster than the time deposits in
rubles, but this did not bring about any sig-
nificant changes in the structure of quasi-
money, however. The acceleration of the
dynamics of foreign currency deposits
caused their share in M2X to slightly expand
in April-June, but the ruble component of
quasi-money continued to dominate its
structure.
The household and enterprise sector’s
time bank deposits in rubles accounted for
27.7% of the M2X aggregate as of July 1,
2004, as against 24% a year earlier, while
the share of foreign currency deposits con-
tracted by nearly 3 percentage points to
18.9%.
The acceleration of growth in foreign
currency deposits (11.7% in Q2 as against
2.7% in Q1) was accompanied by the change
of the trend and in the dynamics of the value
of foreign exchange in the non-banking
sector of the economy: after a contraction
by $3.2 billion in Q1, in April-June it grew by
about $500 million, according to a prelimi-
nary balance of payments estimate (in
2003 Q2, it contracted by $2.4 billion).
A slight fall of the ruble in nominal terms in
the second quarter of the year and the de-
valuation expectations and negative devel-
opments in the banking sector led to the re-
sumption and growth of economic agents’
demand for assets denominated in foreign
currency. At the same time, the ruble’s rela-
tively stable and gradual dynamics con-
tained consumer price growth.
As in 2003 H1, the increase in time ruble
deposits was chiefly due to growth in house-
hold sector funds, especially deposits with
terms from 1 year to 3 years, although their
growth slowed in the second quarter.
The expansion of the time ruble com-
ponent (it grew about 7% in 2004 Q2 as
against 13.5% in 2003 Q2) accounted for
nearly one-third of M2 growth in April-June
2004. The share of the non-cash transac-
tion component was almost the same. Al-
though the dynamics of the non-cash ruble
supply in the household sector and non-fi-
nancial enterprise sector were basically alike,
growth in household funds slowed down
more significantly than growth in non-fi-
nancial enterprise funds. As a result, the
share of the household sector funds in the
non-cash component of the M2 aggregate
Inflation Review
Second Quarter ♦ 2004
contracted slightly, but household funds
continued to prevail as a source of resources
for banks.
Time ruble and foreign currency depos-
its taken on by banks from enterprises and
households, which, on the one hand, absorb
surplus liquidity and, on the other hand, pro-
vide a basis for the expansion of lending
volumes, increased by 172 billion rubles, or
8.8% in 2004 Q2 as against 2.8% a year
earlier. Banking sector’s lending buoyancy,
which led to the expansion of the aggregate
money supply, was a major source of
growth in the money supply in the second
quarter of the year (claims on private sec-
tor enterprises amounted to more than 300
billion rubles in April-June 2004). At the
same time, the dynamics of monetary indi-
cators were affected by the continued in-
crease in banking sector net foreign assets.
Eventually, the declining path of mon-
etary indicators, which became established
in the second quarter, may be considered an
encouraging development per se, because
it may alleviate the pressure of money sup-
ply growth on core inflation by the end of
the year, provided that seasonal peaks in
cash dynamics and budget spending are
avoided at the end of the year. However, the
factors behind the slowing of the ruble sup-
ply dynamics, especially structural changes
caused by renewed preference for foreign
currency assets, may lead to instability of
the future dynamics of monetary indicators.
The extreme susceptibility of the for-
eign currency component of the broad
money supply, which includes foreign cur-
rency deposits and foreign exchange held
by non-financial agents, to the changes in
the ruble’s nominal rate against the dollar
may have significant effect on the dynam-
ics of the ruble component of the money
supply. The currency replacement processes
make it increasingly difficult for the mon-
etary authorities accurately to predict the
dynamics of monetary indicators, because
the foreign currency component of the
broad money supply does not lend itself to
any accurate assessment or direct control by
the central bank, reducing the predictabil-
ity of the ruble component of the money
supply. The recovery and strengthening of
confidence in the banking sector and na-
tional currency will help improve the struc-
ture of money supply growth.
Inflation Review
Second Quarter ♦ 2004
The term structure of interest rates
on the ruble financial instruments with
different maturities in the second quar-
ter of the year reflected considerable
fluctuations in the demand for money
and its supply. The principal factors that af-
fected financial market interest rates in the
period under review were, as before, the
level of banking sector liquidity, the issuer’s
policy on the GKO-OFZ government securi-
ties market and the dynamics of the US
dollar’s nominal rate against the ruble.
The second quarter of the year saw a
rise in interest rates on interbank ruble loans
as the quarter’s average level of commer-
cial banks’ liquidity declined. Interest rates
on loans with terms up to 6 months in-
creased significantly, but it did not mean a
rise in market participants’ inflationary ex-
pectations. It was rather the result of the
increased distrust between money market
participants, caused by the deterioration of
the financial condition of some small and
medium-sized banks. The decline in market
participants’ mutual confidence adversely
affected the effectiveness of the redistri-
bution of ruble liquidity between Russian
banks, causing interbank lending rates to
rise and interbank loan market turnovers to
contract. Interest rates on the longest-term
loans changed slightly. The interbank loan
yield curve continued to rise gently in the
second quarter, while the term structure
of interbank interest rates in April-June
reflected, as before, a relatively low and
stable level of market participants’ in-
flationary expectations.
The bank lending yield curve remained
convex, retaining its positive slope in the up
to 3 months section. However, the fall in in-
terest rates on operations for terms longer
than 3 months in the second quarter, pro-
voked by the expectations of a seasonal
slowing of inflation in the third quarter,
caused this section of the yield curve to
move down while retaining its slightly nega-
Financial Market Indicators of Importance for Inflation
Inflation Review
Second Quarter ♦ 2004
tive slope. The bank lending yield curve may
indicate medium-term expectations of a
further moderate fall in interest rates in
this segment of the Russian market and
a possible drop in the inflation rate.
The GKO-OFZ yield curve continued to
rise in the second quarter. As government
securities market turnovers contracted by
more than half quarter on quarter, the yield
on the instruments with maturities up to 9
years increased significantly, while the yield
on longer-term securities was almost un-
changed. Short-term government bond
prices did not include any inflation risk
premium, while the current level of yields
was determined by the structure of demand
on the money market. The medium- and
long-term inflationary expectations of mar-
ket participants were unchanged from the
previous quarter. Investments in medium-
term government bonds involve moder-
ate inflation risk, with the risk of invest-
ing in securities with maturities longer
than 5 years determined on the basis of
the former.
GKO-OFZ secondary market turnovers
contracted in the second quarter to 900 mil-
lion rubles a day from 1.9 billion rubles a day
in the first quarter. As tension escalated on
the money market, the share of government
bonds with maturities up to 3 months in to-
tal GKO-OFZ secondary market turnover in-
creased almost 8 times over quarter on quar-
ter. The share of government bonds with a
maturity from 3 months to 1 year contracted
almost by half, while that of medium- and
long-term papers was virtually unchanged
owing to the high liquidity of the indicative
OFZ-AD bond issues. The GKO-OFZ turn-
Inflation Review
Second Quarter ♦ 2004
over structure in April-June reflected the
change in government securities market
participants’ priorities amid relatively
low inflationary expectations.
* * *
The analysis of the term structure of
interest rates on the segments of the finan-
cial market under review shows that the
volatility of price indicators for most of the
ruble-denominated instruments of the fi-
nancial market was moderate in the second
quarter. In this situation, the yield curves of
the major ruble-denominated instruments
of the Russian market retained their infor-
mative value, especially as a pointer to mar-
ket participants’ inflationary expectations.
The structure of interest rates by term
remained stable in the period under review.
The yield curves of key financial instru-
ments tended to rise, reflecting stability
of Russian financial market participants’
short- and medium-term inflationary
expectations.
As for the long-term inflationary expec-
tations, they are impossible to evaluate ac-
curately due to the small scale of operations
with long-term financial instruments. The
fact that the yield curves of various long-
est-term instruments remained almost
flat in the second quarter may indicate a
certain degree of inertia in market par-
ticipants’ expectations.
Inflation Review
Second Quarter ♦ 2004
Consumer price dynamics by group of goods and services
(month on month, %)
Monthly
inflation
Food price
growth
Growth in food
prices, excluding
vegetable prices
Vegetable and
fruit price
growth
Non-food price
growth
Core
inflation
Service price
growth
January 2.4 2.5 1.3 13.1 1.1 1.2 4.4
February 1.6 1.2 0.8 4.1 0.9 0.9 4.2
March 1.1 1.0 0.6 3.9 0.8 0.7 1.7
April 1.0 1.0 0.5 4.2 0.6 0.6 1.8
May 0.8 0.7 0.4 2.5 0.6 0.6 1.5
June 0.8 0.8 0.6 2.3 0.5 0.6 1.2
July 0.7 0.4 0.7 -1.8 0.5 0.7 1.9
August -0.4 -1.4 0.8 -17.2 0.6 0.7 0.7
September 0.3 -0.2 1.1 -11.2 0.9 1.1 0.9
October 1.0 1.1 1.8 -5.6 1.0 1.4 0.8
November 1.0 1.2 1.3 1.0 0.8 1.1 0.4
December 1.1 1.5 1.2 4.1 0.6 1.0 0.9
Full year (December
on December) 12.0 10.2 11.8 -4.2 9.2 11.2 22.3
January 1.8 1.6 1.3 5.5 0.5 0.9 4.1
February 1.0 1.1 1.1 1.5 0.4 0.8 1.6
March 0.8 1.1 0.9 2.8 0.4 0.7 0.6
April 1.0 0.8 1.0 -0.6 0.6 0.8 2.0
May 0.7 0.4 0.5 -0.7 0.8 0.6 1.4
June 0.8 0.8 0.4 4.8 0.7 0.5 0.9
Statistical Addendum
Inflation Review
Second Quarter ♦ 2004
Consumer price dynamics by group of goods and services
(on accrual basis since start of year, %)
Inflation
over period
Food price
growth
Growth in food
prices, excluding
vegetable prices
Vegetable and
fruit price
growth
Non-food price
growth
Core
inflation
Service price
growth
January 2.4 2.5 1.3 13.1 1.1 1.2 4.4
February 4.1 3.7 2.2 17.8 2.0 2.1 8.8
March 5.2 4.8 2.8 22.4 2.8 2.8 10.6
April 6.2 5.8 3.3 27.6 3.5 3.4 12.6
May 7.1 6.5 3.8 30.8 4.1 4.0 14.2
June 7.9 7.4 4.4 33.7 4.6 4.7 15.6
July 8.7 7.8 5.1 31.4 5.1 5.4 17.8
August 8.3 6.3 6.0 8.7 5.7 6.2 18.7
September 8.6 6.1 7.1 -3.4 6.6 7.3 19.7
October 9.7 7.3 9.1 -8.9 7.7 8.9 20.7
November 10.8 8.6 10.4 -7.9 8.6 10.1 21.2
December 12.0 10.2 11.8 -4.2 9.2 11.2 22.3
January 1.8 1.6 1.3 5.5 0.5 0.9 4.1
February 2.8 2.8 2.3 7.1 0.9 1.7 5.8
March 3.5 3.8 3.2 10.1 1.4 2.4 6.4
April 4.6 4.7 4.2 9.5 2.0 3.2 8.5
May 5.3 5.2 4.8 8.7 2.8 3.8 10.0
June 6.1 6.0 5.2 13.9 3.4 4.3 11.0
Inflation Review
Second Quarter ♦ 2004
Inflation Growth Structure
Inflation growth over period since start of year due to changes
in prices by group of goods and services
Foodstuffs* Non-food
products Core inflation Paid
services
Vegetables
and fruit
Inflation over
period, %
January 0.7 0.3 1.0 0.8 0.7 2.4
February 1.1 0.5 1.7 1.5 0.9 4.1
March 1.4 0.8 2.3 1.8 1.2 5.2
April 1.7 1.0 2.8 2.2 1.4 6.2
May 1.9 1.1 3.3 2.4 1.6 7.1
June 2.2 1.3 3.8 2.7 1.8 7.9
July 2.6 1.4 4.4 3.1 1.6 8.7
August 3.0 1.6 5.0 3.2 0.5 8.3
September 3.6 1.8 6.0 3.4 -0.2 8.6
October 4.5 2.1 7.2 3.5 -0.5 9.7
November 5.2 2.4 8.2 3.6 -0.4 10.8
December 5.9 2.5 9.1 3.8 -0.2 12.0
January 0.6 0.1 0.8 0.7 0.3 1.8
February 1.2 0.2 1.4 1.0 0.4 2.8
March 1.6 0.4 2.0 1.1 0.5 3.5
April 2.1 0.5 2.6 1.4 0.5 4.6
May 2.4 0.8 3.1 1.7 0.4 5.3
June 2.6 0.9 3.5 1.9 0.7 6.1
* Excluding vegetables and fruit.
Inflation Review
Second Quarter ♦ 2004
Monthly inflation growth rate due to changes in prices
by group of goods and services
Foodstuffs* Non-food
products Core inflation Paid
services
Vegetables and
fruit
Inflation
over month, %
January 0.7 0.3 1.0 0.8 0.7 2.4
February 0.4 0.2 0.7 0.7 0.2 1.6
March 0.3 0.2 0.6 0.3 0.2 1.1
April 0.3 0.2 0.5 0.3 0.3 1.0
May 0.2 0.2 0.4 0.3 0.2 0.8
June 0.3 0.1 0.5 0.2 0.1 0.8
July 0.3 0.1 0.5 0.4 -0.1 0.7
August 0.4 0.1 0.6 0.1 -1.1 -0.4
September 0.5 0.2 0.9 0.2 -0.6 0.3
October 0.9 0.3 1.2 0.1 -0.3 1.0
November 0.6 0.2 0.9 0.1 0.0 1.0
December 0.6 0.2 0.8 0.2 0.2 1.1
January 0.6 0.1 0.8 0.7 0.3 1.8
February 0.5 0.1 0.6 0.3 0.1 1.0
March 0.4 0.1 0.6 0.1 0.1 0.8
April 0.5 0.2 0.6 0.4 0.0 1.0
May 0.3 0.2 0.5 0.3 0.0 0.7
June 0.2 0.2 0.4 0.2 0.3 0.8
* Excluding vegetables and fruit.
Inflation Review
Second Quarter ♦ 2004
Contribution to Inflation Growth
Contribution to inflation growth over period since start
of year by group of goods and services
Foodstuffs* Non-food products Core inflation Paid services Vegetables and
fruit
January 27.5 12.4 40.6 31.6 28.5
February 26.7 13.4 41.8 37.1 22.8
March 27.3 14.9 44.2 35.3 22.5
April 27.0 15.3 44.9 34.7 23.1
May 26.9 15.9 46.1 34.5 22.7
June 28.1 16.0 47.9 33.7 22.2
July 29.7 16.2 50.2 35.2 18.8
August 36.5 19.1 60.7 38.9 5.5
September 41.6 21.2 69.1 39.3 -2.1
October 46.7 21.6 74.3 36.4 -4.7
November 48.5 21.7 76.3 33.6 -3.8
December 49.1 21.0 75.9 31.7 -1.8
January 35.8 7.6 43.2 40.3 16.3
February 42.3 9.0 50.0 35.4 13.3
March 45.0 10.3 55.3 30.2 14.5
April 46.1 11.7 57.5 31.5 10.7
May 45.2 14.2 58.5 32.2 8.5
June 42.2 15.3 57.2 30.7 11.8
* Excluding vegetables and fruit.
Inflation Review
Second Quarter ♦ 2004
Contribution to inflation growth over month
by group of goods and services (%)
Foodstuffs* Non-food products Core inflation Paid services Vegetables and
fruit
January 27.5 12.4 40.6 31.6 28.5
February 25.5 15.0 43.7 45.0 14.6
March 29.7 20.3 53.0 28.3 21.7
April 25.5 17.2 48.7 31.6 25.7
May 25.9 21.2 55.3 33.1 19.8
June 38.4 16.6 62.7 26.9 18.1
July 46.8 18.9 74.7 50.7 -16.4
August estimate is impossible for negative value
September 164.8 72.9 270.6 50.5 -188.3
October 86.6 25.6 114.6 14.2 -26.4
November 63.8 23.3 94.1 8.4 4.5
December 53.8 14.2 71.7 15.1 16.9
January 35.8 7.6 43.2 40.3 16.3
February 53.5 11.5 61.8 26.8 8.1
March 54.6 14.8 74.2 11.5 19.2
April 49.6 17.1 65.1 36.3 -2.9
May 39.1 30.1 64.9 36.2 -5.4
June 22.8 22.7 48.2 21.0 33.6
* Excluding vegetables and fruit.
Inflation Review
Second Quarter ♦ 2004
Inflation Review
Second Quarter ♦ 2004
Inflation Review
Second Quarter ♦ 2004
Inflation Review
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Inflation Review
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Inflation Review
Second Quarter ♦ 2004
© The Central Bank of the Russian Federation, 2004
Research and Information Department