CBR Quarterly Inflation Review - Q4 2007
Central bank: cbr | Type: quarterly_review | Date: 2007-12-31

THE CENTRAL BANK
OF THE RUSSIAN FEDERATION
(BANK OF RUSSIA)
Quarterly
Inflation
Review
2007 Q4
Research and Information Department
The electronic version of Quarterly Inflation Review is available on the Bank of Russia's website :

Contents
Introduction ............................................................................................................... 3
Inflation Dynamics ...................................................................................................... 4
Consumer prices ........................................................................................................................................... 4
Housing prices .............................................................................................................................................. 6
Producer prices ............................................................................................................................................. 6
Inflation in some countries of the world ......................................................................................................... 7
Foreign trade ................................................................................................................................................ 8
Demand ........................................................................................................................................................ 11
Production ................................................................................................................................................... 14
Labour market ............................................................................................................................................. 14
Monetary Conditions ................................................................................................. 16
Exchange rate .............................................................................................................................................. 16
Interest rates ................................................................................................................................................ 18
Monetary aggregates.................................................................................................................................. 24
Credit aggregates ....................................................................................................................................... 26
Statistical Addendum ................................................................................................ 29
32007 Q4
Inflation Dynamics
In 2007, inflation exceeded the projected
target as well as the previous year’s level. Rapid
growth in domestic demand and significant in-
crease in world food prices affected price dynam-
ics.
Economic growth accelerated in Russia in
2007. According to estimates, actual output last
year was higher than potential output and this
stimulated inflation in the economy.
As wages grew faster in 2007 than in 2006,
the share of expenditures on remuneration ex-
panded in the value added. There was an accel-
eration of price growth in the mining sector and
the production of consumer goods, such as food-
stuffs, textiles and clothing, leather and leather
goods and footwear.
Inflation in the countries that are the major
exporters of goods to Russia, calculated taking
into consideration their relative importance for
Russian imports in 2007, accelerated by 2.3 per-
centage points on average year on year, creating
conditions for faster price growth in the Russian
economy.
The latter half of 2007 saw the acceleration
of growth in some food prices, which largely fol-
lowed world food price increases and not much
could be done to mitigate the adverse effect of
this process on price dynamics by using monetary
policy instruments.
The rise in economic activity was the major
factor of the acceleration of monetary and credit
aggregates dynamics. Capital inflow was an im-
portant factor of growth in the money supply in
Introduction
2007. Despite the slowing of growth of monetary
aggregate M2 in the fourth quarter, it continued
to increase rapidly. The positive monetary gaps
that appeared in 2007 indicate that the money
supply continues to pose inflationary risk in the
medium and long term.
In the fourth quarter of 2007 the Bank of
Russia took steps to cushion the effect of the ex-
ternal factors that had created harsher credit con-
ditions for the economy in the third quarter. As
foreign credit grew more expensive and the bank-
ing sector liquidity situation became more vola-
tile, the Bank of Russia increased the internal refi-
nancing by broadening the range of instruments
used to provide liquidity and making these instru-
ments more accessible for credit institutions. The
temporary lowering of the required reserves in the
fourth quarter was also aimed at enabling the
banks to use a part of their reserves and reducing
the cost of borrowing. Banks could satisfy their
increased need in internal refinancing by conduct-
ing open-market operations and using permanent
money market instruments. Bank of Russia opera-
tions to withdraw liquidity also proved useful due
to the uneven formation of banking sector liquid-
ity. The Bank of Russia interest rate band remained
unchanged, whereas the range of MIACR fluctua-
tions narrowed in the fourth quarter as compared
with the third, while the MIACR level increased.
Growth in credit and deposit rates was small and
it has not had any significant impact on credit dy-
namics yet.
2007 Q4
Consumer price inflation (%)
Growth
(December 2007
on December 2006)
Growth
(December 2006
on December 2005)
Prices of goods and services, total 11.9 9.0 Acceleration of growth
by 2.9 percentage points
Of which:
- food prices 15.6 8.7 Acceleration of growth
by 6.9 percentage points
- food prices, excluding vegetable and fruit prices 14.9 8.5 Acceleration of growth
by 6.4 percentage points
- non-food prices 6.5 6.0 Acceleration of growth
by 0.5 percentage points
- prices of paid services provided to households 13.3 13.9 Slowing of growth
by 0.6 percentage points
Prices of goods and services included in core inflation calculation 11.0 7.8 Acceleration of growth
by 3.2 percentage points
Source: Rosstat.
Inflation Dynamics
Consumer prices
According to Russia’s Federal State Statis-
tics Service (Rosstat), consumer prices rose 11.9%
in 2007, an increase of 2.9 percentage points on
2006. They gained 3.4% in the first quarter, 2.2%
in the second, 1.8% in the third and 4.1% in the
fourth.
The acceleration of inflation was due to core
inflation, which stood at 4% in the fourth quar-
ter as against 1.7% in the first, 1.2% in the second
and 3.7% in the third. Core inflation accelerated
to 11% in 2007 as against 7.8% in 2006.
It is estimated that growth in the prices of
goods and services included in the calculation of
the core consumer price index in 2007 accounted
for 8.7 percentage points, or 72.8%, of overall
consumer price growth (as against 6.1 percentage
points, or 67.1%, in 2006).
Significant growth in food prices, exclud-
ing vegetable and fruit prices, made the princi-
pal contribution to the acceleration of inflation.
These prices gained 14.9% in 2007 year on year
(in 2006 they rose 8.5%). According to estimates,
growth in these prices accounted for 5.4 percent-
age points, or 45.6%, of overall consumer price
growth in 2007. At the same time, growth in bread
and bakery product prices and milk and dairy prod-
uct prices accounted for about 1.3 percentage
52007 Q4
Inflation Dynamics
Food price inflation (%)
Growth (December 2007 on
December 2006)
Growth (December 2006 on
December 2005)
Food products 15.6 8.7 Acceleration of growth by 6.9 percentage
points
Bread and bakery products 22.4 11.1 Acceleration of growth by 11.3 percentage
points
Cereals and legumes 24.7 12.1 Acceleration of growth by 12.6 percentage
points
Pasta 23.6 4.7 Acceleration of growth by 18.9 percentage
points
Meat and poultry 8.4 5.9 Acceleration of growth by 2.5 percentage
points
Fish and seafood 9.0 7.8 Acceleration of growth by 1.2 percentage
points
Milk and dairy products 30.4 8.7 Acceleration of growth by 21.7 percentage
points
Butter 40.3 6.8 Acceleration of growth by 33.5 percentage
points
Sunflower oil 52.3 -1.2
Granulated sugar -4.3 14.9
Vegetables and fruit 22.2 10.3 Acceleration of growth by 11.9 percentage
points
Alcoholic beverages 7.7 10.1 Slowing of growth by 2.4 percentage
points
Source: Rosstat.
points, or 11.0%. In 2006, this group of products
accounted for 0.5 percentage points, or 5.8%, of
overall consumer price growth.
The acceleration of growth in food prices,
excluding vegetable and fruit prices, occurred in
the second half-year when there was a significant
increase in the prices or fats and milk and dairy
products, which reflected the expansion of do-
mestic and world demand for foodstuffs amid the
limited capabilities for production growth. The
production of vegetable oil in Russia fell 3.3% in
2007 year on year. Although the output of dairy
products rose by 0.3% overall, there was a decline
in the output of some of these products: the out-
put of low-fat dairy products was down 14.7% in
terms of skimmed milk and the output of dry
whole milk, dry cream and dry mixtures for ice-
cream fell 0.1%. The production of flour decreased
2.6%, bread and bakery products 1.8% and pasta
2.7%.
In the first half of 2007, the most signifi-
cant increase was registered in the prices of grain
products. The price of sunflower oil rose 52.3%
over the year (in 2006 it was down 1.2%), butter
40.3% (as against 6.8% in 2006), milk and dairy
products 30.4% (as against 8.7%) and bread and
bakery products 22.4% (as against 11.1%).
Vegetable and fruit prices gained 22.2%
in 2007, an increase of 11.9 percentage points on
2006. It is estimated that growth in vegetable and
fruit prices accelerated by 0.9 percentage points
and accounted for 7.2% of overall consumer price
growth (as against 0.4 percentage points and
4.5% in 2006).
Overall food price growth quickened to
15.6% in 2007 from 8.7% in 2006.
As was the case in the previous years, non-
food prices grew more slowly than the prices of
other major goods and services. In 2007, their
growth stood at 6.5% as against 6% in 2006. The
most significant increase was registered in the
prices of building materials (16.2%), car petrol
(8.5%) and knitwear (8.3%). In 2006, these
prices rose by 11.5%, 10.9% and 8.0%, respec-
tively.
Service prices increased 13.3% in 2007 as
against 13.9% in 2006. Estimates show that
growth in service prices accounted for 3.3 percent-
age points, or 27.8%, of overall consumer price
growth (as against 3.3 percentage points, or
36.3%, respectively, in 2006).
Housing and utility prices increased 14% in
2007 as against 17.9% in 2006, whereas growth
in communications service prices accelerated to
10.8% from 2.1% as a result of significant growth
in the city telephone service charges in February.
Overall, growth in service prices in 2007 is esti-
mated at 13.6%, a decrease of 0.1 percentage
points from 2006.
The rise in the prices of paid services pro-
vided to the public in 2007 exceeded overall
growth in the prices of goods by 2.0 percentage
points (as against 6.4 percentage points in 2006).
According to Rosstat, consumer price
2007 Q4
1 The regional difference ratio is calculated by the Bank of Russia as the difference between the price of a fixed set of goods and
services in the most expensive and the cheapest regions relative to the national value of the same set.
2 As of end of period.
growth in all federal districts in 2007 was faster
than in 2006.
Estimates show that the differences be-
tween the Russian regions in terms of the price of
a fixed set of goods and services used by Rosstat
to make interregional comparisons of the purchas-
ing power of the population became less pro-
nounced in 2007. The regional difference ratio
decreased from 45.3% to 40.2% last year.
Growth in non-food prices in all regions
ranged from 6.1% to 7.1%. The rates of growth in
vegetable and fruit prices differed widely in the
Russian regions. In the Volga Federal District, for
instance, vegetable and fruit prices grew 32.9%,
whereas in the Far Eastern Federal District they
increased 9.7%.
In 2007, most of the federal districts regis-
tered the year-on-year slowing of growth in ser-
vice prices. The Volga Federal District was the only
exception.
Housing prices
Housing prices continued to rise faster than
inflation. In the fourth quarter of 2007, housing
prices increased 23.4% on the primary market and
20.6% on the secondary market, as compared
with the same period in 2006
2. Nevertheless, they
grew more slowly than in 2006 (47.7% and
54.4%, respectively).
The slowing of growth in housing prices was
accompanied by rapid growth in housing con-
struction, which accelerated to 119.4% in 2007
from 116.1% in 2006.
Producer prices
Industrial producer prices rose 25.1% in
2007 as against 10.4% in 2006. The acceleration
of growth in producer prices was due to the fact
that prices in the mining sector soared 52.3% as
compared with 1.6% in 2006. Fuel and energy pro-
ducer prices jumped 58.1%, whereas in 2006 they
fell 3.6%. Metal ore producer prices increased
11.5% as against 49.4% in 2006. It has been esti-
mated that the change in producer prices in the
mining sector in 2007 accounted for 11.7 percent-
age points, or 46.8%, of overall growth in indus-
trial producer prices. In 2006, it accounted for 0.4
percentage points, or 3.5%.
Rapid growth in industrial producer prices
increased costs and this stimulated inflation.
In 2007, price growth in the manufacturing
sector stood at 17.9% as against 13.3% in 2006.
The acceleration of price growth in the
manufacturing industries that supply products to
the consumer goods market was a major factor
of higher consumer price inflation. Specifically,
price growth accelerated in 2007 year on year in
the production of foodstuffs, including bever-
72007 Q4
Inflation Dynamics
ages, and tobacco (to 20.0% as against 8.3%),
textile and clothing production (to 9.6% as against
4.0%), and the production of leather, leather
goods and footwear (to 8.7% as against 6.6%).
Price growth in the production, transmission
and distribution of electricity, gas and water stood
at 13.3% as against 10.3% in 2006.
Growth in freight transportation charges
reached 16.7% in 2007 from 15.8% in 2006, while
railway fares increased 7.7% as against 8.9% a
year earlier.
Communication fees for corporate enti-
ties gained 4% in 2007 as against 1.3% in 2006.
According to preliminary data, the compos-
ite price index for building materials registered
117.4% as against 112.4% in 2006.
Agricultural producer prices increased
30.2% as against 10.4% in 2006. Producer prices
grew in both crop farming and livestock breed-
ing. Crop farmer prices rose 37.3% in 2007 as
against 21% a year earlier. Growth was particu-
larly high in grain production (45.5% as against
29.4% in 2006), potato production (31.1% as
against 3.3%) and the production of sunflower
(5.7% as against a fall of 4.4% in 2006). Livestock
producer prices rose 25.5% in 2007 as against
4.2% in 2006. The biggest growth was registered
in milk prices (56.4% as against 3.4% in 2006).
The acceleration of agricultural producer prices
had an adverse effect on food price dynamics on
the consumer goods market.
Inflation in some countries of the
world3
Inflation in the countries that are the major
exporters of goods to Russia accelerated to 5.8%
in 2007 from 3.5% in 2006 (December on Decem-
ber of the previous year). Price growth acceler-
ated in most of the countries that account for a
large portion of Russian imports. The biggest con-
tribution to growth in aggregate inflation in the
3 Based on data provided by the US Labor Department’s Bureau of Labor Statistics, the Statistical Office of the European Commu-
nities EUROSTAT, China’s National Statistics Bureau and national statistical offices of other countries. Contribution of individual
factors to US and eurozone inflation has been evaluated by the Bank of Russia.
2007 Q4
countries that are the major exporters of goods
to Russia was made by the acceleration of price
growth in Ukraine (to 16.6% from 11.6% in 2006),
Kazakhstan (to 18.8% from 8.4%), Belarus (to
12.1% from 6.6%), China (to 6.5% from 2.8%),
Germany (to 3.1% from 1.4%), Poland (to 4%
from 1.4%), the United States (to 4.1% from
2.5%) and South Korea (to 3.6% from 2.1%).
The factors behind the accelerated inflation
in foreign countries in 2007 were the increased
production costs, higher energy prices and signifi-
cant growth in food prices connected with poor
grain harvests, the rise in fodder prices, the lifting
of subsidies in agricultural production and exports
in some countries, and the use of agricultural
products for the production of bio-fuel. Food price
growth affected the most inflation figures in the
countries with a large portion of food products in
their consumer goods baskets (former Soviet re-
publics, China and Poland).
In the United States the single most impor-
tant factor of accelerated inflation in 2007 was
the quickening of growth in energy prices. The
contribution of core inflation
4 somewhat de-
creased as growth in employment figures and con-
sumer spending slowed down. In Germany, how-
ever, the contribution of core inflation to overall
consumer price growth increased and was the de-
cisive factor of the accelerated consumer price
growth in 2007. The acceleration of core inflation
was due to growth in university tuition fees, trans-
port fares, communication fees and the price of
insurance and other services. In the United States,
as in Germany, the aggregate contribution of the
changes in energy and food prices was bigger than
that of core inflation. In the eurozone as a whole
the acceleration of core inflation was a far less sig-
nificant factor of the increase in the general level
of consumer prices than growth in energy and
food prices.
Foreign trade
The price situation on the world markets for
the major Russian export commodities was good
in 2007. Prices5 for the Russian exporters were on
average higher than in 2006, while energy prices
were higher by 11% and non-energy by 6%.
Oil prices mostly increased on the world
market in 2007 after the fall in the second half of
2006 and the beginning of 2007 (in the middle of
January 2007 the price of Russian oil dropped to
$46.6 per barrel). By the end of the year oil prices
had doubled and reached $97 per barrel. The main
reasons for the rise in oil prices on the world mar-
ket were the weakening of the US dollar against
other major world currencies, faster growth in the
world demand for oil, especially in the rapidly de-
veloping countries of Asia, China first and fore-
4 Growth in prices of goods and services included in the consumer goods basket, except foodstuffs and energy products.
5 Average prices have been calculated on the basis of data provided daily by the following news agencies and exchanges: Reuters
for oil, Petroleum Argus for petroleum products (petrol, diesel fuel and fuel oil) and the London Metal Exchange for non-ferrous
metals (aluminium, copper and nickel). The source of data on average monthly prices of natural gas and ferrous metal price
indices is the World Bank and data on average monthly prices of other goods are provided by the International Monetary Fund.
92007 Q4
Inflation Dynamics
most, the tough stand taken by the OPEC mem-
ber countries on the oil production quotas (10
OPEC member countries, excluding Iraq and
Angola, have not changed the oil production quo-
tas since July 2005) and some other geopolitical
and climate factors.
As a result, the average price of Urals crude
in 2007 rose 14.1% year on year, to $69.5 per bar-
rel, according to Bank of Russia calculations. Pe-
troleum product prices were up 13.5% on average
and the price of natural gas in Europe was higher
by 1.0%.
Prices changed slightly on the world ferrous
metal market in 2007 and on average they re-
mained virtually unchanged from the previous
year. Non-ferrous metal prices increased year on
year: aluminium was up 2.6%, copper up 5.9%
and nickel up 50%. The prices of other raw mate-
rials exported by Russia, except wood and saw-
timber products, were higher than in 2006.
Growth in the prices of some food products
on world markets in 2007 was due to rapid increase
in demand, especially in the rapidly developing
countries of Asia, which grew faster than output,
the increased use of agricultural raw materials in
the production of bio-fuel and the reduction of
raw material stocks.
The world market prices of the major food
products
6 imported by Russia in 2007 mostly in-
creased and they rose especially fast in the sec-
ond half of the year. Prices of grain, sunflower
oil, butter, milk and dairy products and vegetable
and fruit prices rose significantly on the world
market year on year and there was also a rise in
poultry and beef prices.
According to FAO
7, world grain production
in 2007 was slightly higher than in 2006: the out-
put of wheat rose 1% and maize 12%. Barley pro-
duction declined 1%. However, more rapid growth
in demand, especially in developing countries,
caused grain prices to increase. High energy prices
brought about a significant rise in the demand for
grain used as raw material in the production of
bio-fuel (ethanol). Despite rising demand, FAO
believes that world grain exports may fall in the
2007/2008 agricultural year: wheat exports may
be down 5% and barley exports may decline 6%,
while maize exports are expected to rise by 1%. It
is expected that the world’s leading exporters such
as Canada, the European Union, Argentina, Aus-
tralia and Ukraine will cut wheat exports dramati-
cally, China and Paraguay are expected to signifi-
cantly reduce maize exports and Australia and
Ukraine the export of barley. In June 2007, the
Ukrainian government placed a temporary ban on
wheat exports and on November 1 it imposed quo-
tas on grain exports.
Growth in the world demand for grain in the
consumer sector and in industrial production cre-
ated preconditions for the rise in prices. The World
Bank reported the following data on the major
grain exporters’ markets: the price of wheat rose
32.9% in the United States and 38.6% in Canada,
the price of maize in the United States increased
34.3% and the price of barley in Canada grew
47.0%.
Russian wheat exports to the world market
increased significantly in 2007 year on year: in
January-November wheat export volumes ex-
panded almost 50% and contract export prices
rose 77.2%. Moreover, at the end of the year
growth in wheat exports accelerated. In October-
November 2007, wheat export volumes more than
doubled as compared with the same period in
2006. At the same time, wheat imports contracted
6 Average prices of raw and refined sugar have been calculated on the basis of data provided daily by the London Commodity
Exchange. The source of data on average monthly prices of grain is the World Bank, beef, pork and poultry the International
Monetary Fund and sunflower oil the All-Russia Market Research Institute’s Bulletin of Commercial Information.
7 The United Nations Food and Agriculture Organisation (November 2007).
2007 Q4
by two-thirds in the 11 months of 2007 even
though the contract price grew 36.9%. Wheat
export volumes in that period exceeded import
volumes by 29.1 times (6.5 times in January-No-
vember 2006).
Prices of animal and vegetable fats rose fast
on the world market in 2007, especially in the sec-
ond half of the year, as the rapidly expanding bio-
fuel market began increasingly to affect the bal-
ance between the resources and demand for ed-
ible animal and vegetable fats.
Fewer crops practically in all producer coun-
tries of the Northern Hemisphere and the reduc-
tion of the sunflower seed processing volumes in
the EU, Ukraine, Russia and Turkey, the world’s
top five sunflower oil producers, led to a sharp rise
in prices. According to FAO estimates, the world
production of oil-bearing raw materials in the
2007/2008 agricultural year may decline by 3%;
in the United States and Canada the reduction may
be as much as 16%, in the EU 3%, in Turkey 9%,
in Russia 5% and in Ukraine 16%. Vegetable oil
exports to the world market may also fall: by 10%
from the United States, by 5% from the EU, by
7% from Russia and by one-third from Ukraine.
In 2007, the price of sunflower oil on the Euro-
pean market rose 55% year on year.
The rise in butter prices was caused by
growth in consumption in some of the major im-
porting countries amid the reduction of world
stocks. Contract prices of imported butter rose
35.1% in January-November 2007, as compared
with the same period of 2006 and in the second
half of the year their growth accelerated. In Oc-
tober-November 2007 these prices increased 80%
as compared with the same period a year earlier.
The world market prices of milk and dairy
products in 2007 rose due to the expansion of
demand by major consumers such as the United
States, Canada, China and other developing coun-
tries. In the 11 months of 2007, the contract im-
port prices of milk increased 59.8%, whereas in
October-November they more than doubled as
compared with the same period of 2006.
The slight rise in beef prices and the fact that
pork prices remained virtually unchanged from
2006 indicate that the situation on this market has
somewhat stabilised. According to FAO estimates,
world meet production increased 1% in 2007. The
rise in poultry prices was due to growth in demand
in the world, especially in Asian countries (China
is becoming the world’s leading importer of poul-
try). Many countries of Africa and the Middle East
restored poultry imports to previous levels, while
some countries increased them. Beef prices rose
2% in 2007 year on year and poultry prices grew
13%.
Fruit and vegetable prices grew on the world
market in 2007. According to the Federal Customs
Service of Russia, in the first nine months of 2007,
import prices of vegetables (potatoes, tomatoes,
onions, cabbage, carrots and other) increased
50%, those of apples and pears went up 24% and
citrus plants 20%.
Sugar prices had been falling on the world
market during the first nine months of 2007, but
in the last three months of the year the price
downturn had given way to price growth. As a re-
sult, the price of raw sugar was down 36% on
2006 and refined sugar was down 34%.
Significant growth in the prices of some
food products on the world market, including
foodstuffs imported by Russia, contributed to the
acceleration of price growth on the consumer
goods market.
Growth in the prices of all imported prod-
ucts in 2007 was slower than growth in export
prices, a process that shows that the terms of
Russia’s trade with foreign countries
8 in 2007 were
better than in 2006.
8 The ratio between export and import price indices.
112007 Q4
Inflation Dynamics
Russia’s trade balance surplus contracted
year on year in 2007 due to the accelerated growth
in imports. It decreased by 5.1% to $132.1 billion
(in 2006 it increased by 17.6% to $139.2 billion).
Russia’s international trade situation 9 in
2007 was affected by uneven intrayear energy
price dynamics and the reduction of foreign de-
mand for metal products. Preliminary data show
that Russian oil and petroleum product exports to
the European Union, the United States and China
changed little from the 2006 levels. The United
States and China reduced the consumption of fer-
rous metals and ferrous metal products imported
from Russia. In 2007, Russia registered for the first
time a deficit in its trade with China. The value of
Belarusian imports from Russia increased due to
growth in import prices, especially energy prices,
amid the slight contraction of import volumes.
Russian exports to Ukraine and Kazakhstan grew,
but their share in Ukraine and Kazakhstan aggre-
gate imports contracted as demand for products
with a high value added, including investment
goods, increased in these countries.
Demand
Domestic demand
Growth in domestic demand, which in-
creased by an estimated 14% (as against 11% in
2006), was a major factor of economic develop-
ment in 2007, as in the previous years. Demand
grew rapidly as the incomes of all economic agents
increased and domestic producers became in-
creasingly attractive to investors.
GDP expanded 8.1% in 2007 year on year, a
growth exceeding the previous five years’ aver-
age. Domestic demand for imports increased
faster than the demand for domestic products.
Compared to the previous year, this gap widened
due to more rapid growth in demand for imports.
The expansion of domestic demand due to
growth in revenues in various sectors of the
economy and the ruble’s real appreciation against
the currencies of Russia’s leading trading partners
facilitated dynamic growth in the import of both
investment and consumer goods. At the same
time, Bank of Russia estimates show that the im-
port of investment goods necessary for economic
development grew a little faster than the import
of consumer goods (the latter mostly increased
due to growth in the import of cars, household
appliances and other non-food products).
Imports from Asia-Pacific Economic Coop-
eration (APEC) member countries, especially
China and Japan, grew faster than overall imports
in 2007. Imports from EU member countries, in-
cluding the eurozone, and the CIS grew more
slowly than overall imports.
The favourable effect of consumer demand
on the expansion of the production of goods and
services was limited by competitive imports. The
share of imported products in the retail trade com-
modity resources in January-September 2007 ex-
panded by a percentage point as compared with
the same period a year earlier and stood at 46.3%.
The share of revenues from food imports ex-
panded from 35.8% to 37.6% and the share of
revenues from non-food imports expanded by 0.2
percentage points to 53.4%.
Growth in imports in 2007 was largely due
to the expansion of import volumes, which slightly
accelerated as compared with 2006. As a year ear-
lier, import prices increased far less than import
volumes. As a result of the acceleration of growth
in import prices in the fourth quarter of 2007, the
import price index rose slightly in 2007 as a whole
compared to 2006 due to the significant rise in
food prices. The rise in the prices of some import
9 According to the US Department of Commerce Bureau of Census, the Statistical Office of the European Communities EURO-
STAT, the Ministry of Commerce of the People’s Republic of China and national statistical offices of other countries.
10 According to data compiled by Russia’s Federal Customs Service.
2007 Q4
GDP consumption (growth as % of corresponding period of previous year)*
2006 2007
Q1 Q2 Q3 Q4 full year Q1 Q2 Q3 full year
GDP 5.0 7.0 6.8 7.8 7.4 7.9 7.8 7.6 8.1
Final consumption 7.9 9.1 9.6 10.2 8.9 9.7 10.0 10.2 10.8
Of which:
- households 9.6 10.7 11.6 12.6 11.3 11.9 12.2 12.8 13.1
Gross capital formation 4.0 16.9 10.4 19.7 18.1 34.2 24.5 19.2 22.6
Net exports -5.9 -14.3 -22.2 -24.3 -15.3 -21.9 -25.1 -36.1 -30.7
- exports 9.0 6.4 6.1 7.4 7.3 3.4 5.2 7.1 7.4
- imports 22.9 21.7 19.1 23.2 21.6 25.5 25.8 27.5 30.4
* Quarterly data have not been revised or matched with the full-year figures; they are to be updated in March 2008.
Source: Rosstat.
products, particularly foodstuffs, provoked price
growth on the domestic market. Growth in the
import of machinery and equipment, especially
motor cars, contributed to the significant increase
in the cost of imports.
Household sector spending on final con-
sumption rose 13.1% in 2007 as against 11.3% in
2006. Economic growth, the financial stability of
enterprises and the provision of more secure gov-
ernment social guarantees in 2007 led to a 12.3%
increase in real money income. The share of wages
and salaries in household money income expanded
from 66.9% to 69.5% in January-September
2007, while the share of incomes from entrepre-
neurial activities contracted. The structure of
household income use also changed slightly in
2007: the share of consumer spending expanded
from 69.0% to 69.6% and the share of compul-
sory payments and duties increased from 10.5%
to 12.6%. As for compulsory payments, there was
an increase in taxes and duties and expenses on
paying interest on loans. The share of organised
savings contracted by 1.4 percentage points to
8.9%. This means that people preferred to spend
more on consumption, using, among other things,
bank loans, than increase organised savings amid
accelerating inflation and low deposit interest
rates.
Rapid increase in consumer spending stimu-
lated retail trade, which accelerated its turnover
growth to 15.2% in 2007 from 13.9% in 2006,
while the value of paid services provided to the
public rose 7.1% (7.9% in 2006). Transport, mu-
nicipal and communications services accounted
for most of the value of paid services.
Government expenditures on final con-
sumption increased 4.9% in 2007 (as against 2.3%
in 2006). The increase in non-interest federal bud-
get expenditures relative to GDP, the uneven
spending of budget funds during the year and, as
a consequence, the build-up of expenditures at
the end of the year stimulated inflation, especially
in the latter half of 2007. At the same time, by
absorbing additional revenues from oil exports
into its Stabilisation Fund the Russian Government
checked growth in consumer prices.
According to Federal Treasury data, in 2007
the federal budget surplus stood at 5.5% of GDP.
This represents a decrease of 1.9 percentage points
from 2006, caused by significant growth in bud-
get expenditures. Federal budget revenues in 2007
increased by 0.3 percentage points year on year
and stood at 23.6% of GDP. This was due to the
acceleration of economic growth and additional
revenues from the sale of YUKOS assets. Mean-
while, oil revenues fell by 1.5 percentage points as
compared with 2006, to 6.6% of GDP, largely as
a result of the ruble’s appreciation against the US
dollar.
Federal budget expenditures rose to 18.1%
of GDP in 2007 (as against 15.9% in 2006). Non-
interest expenditures made up 17.7% of GDP (as
against 15.3% in 2006), the highest ratio since
2000. Expenditures on development institutions,
such as the Municipal Infrastructure Reform Fund,
the Russian Nanotechnology Corporation, the
Development Bank and the Investment Fund, ac-
counted for most of the growth in expenditures.
As these expenditures were financed in the fourth
quarter, the spending of budget funds in 2007 did
not become more even than in 2006. Meanwhile,
the federal budget execution expenditures-wise
in 2007 was just 91.6% of the level written down
in the federal budget law (96.3% in 2006) due to
132007 Q4
Inflation Dynamics
the underfinancing of expenditures on general
government programmes, healthcare and sports
and social programmes.
Gross capital formation increased 22.6% in
2007 (as against 18.1% in 2006). Last year saw a
significant increase in investment activity: fixed
capital investment grew 21.1% (as against 13.7%
in 2006). The largest sums were invested in the
mining sector, transport and communications.
Investments in machinery, equipment and
transport vehicles accounted for more than a third
of total investments. One-fifth was used to ac-
quire imported equipment. Imports of machinery,
equipment and transport vehicles increased 57.6%
in January-November 2007 (as against 49.5% in
the same period of 2006). This growth was partly
the result of the strengthening of the ruble in real
terms. Growth in engineering imports helps
modernise production and, consequently, raise
labour productivity, control price growth in the
economy and create conditions for sustainable
economic growth.
Fixed capital investments were largely fi-
nanced (by 57.2%) by raising funds in January-
September 2007. Growth in revenues in the
economy led to the expansion of the share of bud-
get funds in investment financing (from 17.3% to
18.5%). The share of bank loans in investment fi-
nancing stood at 10.2% (as against 9.3% in Janu-
ary-September 2006).
According to data compiled by Rosstat in the
course of studying investment activity, the princi-
pal objective of investment in 2007 was to replace
worn-out technology, enhance the efficiency of
production and expand production capacity. The
major obstacles to growth in investment were the
shortage of own funds, big risks and high interest
rates on bank loans.
As imports grew considerably faster than
exports, net exports of goods and services de-
creased by 30.7% in 2007.
As a result, on the one hand, high invest-
ment activity and growth in household incomes
stimulated economic growth; on the other hand,
these processes caused production to exceed its
natural (potential) level and, consequently, con-
tributed to the acceleration of price growth on the
consumer goods market.
Foreign demand11
According to IMF and World Bank estimates,
world production growth slowed to 5.2% in 2007
(from 5.3-5.4% in 2006). Production growth in
the countries that account for a substantial part
of Russian exports slowed to 4.7% (from 5% in
2006). Economic growth rates in foreign countries
have been adversely impacted by slackened de-
mand in housing construction and increased mort-
gage credit risks. The slowing of GDP growth in
the United States and Japan was due to the re-
duction of housing construction. GDP growth also
slowed down in Germany, France and Britain.
Belarus’s economy was affected by the change in
the terms of trade, caused by the rise in the price
of imported natural gas and the revision of ex-
port duties on oil imported from Russia and pe-
troleum products exported from Belarus. The re-
duction of the external financing of Kazakhstan’s
economy, connected with the revaluation of risks
by international investors, led to the slowing of
growth in bank credit and brought about a down-
turn in construction and some other manufactur-
ing sectors of the country’s economy.
The value of Russian exports increased in
2007 year on year due to growth in oil and petro-
leum and non-energy product export prices. Ex-
port prices in 2007 grew less than in 2006. Oil ex-
port volumes expanded (they contracted in 2006),
whereas natural gas and ferrous metal export vol-
umes shrank, as they did a year earlier. Exports of
11 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 statistical offices of other countries.
2007 Q4
goods increased 16.9% year on year to total $355.2
billion (according to the balance of payments
methodology). Export volumes grew more slowly
than export prices. Exports of goods to APEC
countries, especially South Korea and Japan, and
CIS countries, particularly the members of the Eur-
asian Economic Community (EurAsEC), rose faster
than overall exports of goods
12 in January-Novem-
ber 2007. Meanwhile, growth in exports to the EU
countries, including the eurozone, slowed down.
Production
The economic situation in Russia in 2007 was
characterised by the year-on-year acceleration of
production growth virtually in all types of eco-
nomic activity.
The manufacturing sector, trade, education
and healthcare increased their contribution to
value added growth in 2007 as compared with
2006, whereas the mining sector’s contribution
decreased. This process indicates that the Russian
economy has become less susceptible to the fluc-
tuating external economic conditions and the role
of the services sector has increased.
Output in the key types of activity increased
8.7% in 2007 (as against 6.1% in 2006). The most
rapid rates of growth were registered in the con-
struction sector and retail trade. Retail trade turn-
over expanded 15.2% (as against 13.9% in 2006),
while growth in the construction sector stood at
18.2% (as against 18.1% a year earlier). In the
meantime, growth in freight transport turnover
slowed to 2.2% in 2007 from 2.7% in 2006.
Price dynamics in the economy were af-
fected by the expansion of the supply of goods.
Industrial output increased 6.3% (as against 3.9%
in 2006). Production growth in the manufactur-
ing sector accelerated from 4.4% in 2006 to 9.3%
in 2007. Dynamic growth was registered in the
sectors that ensure investment demand: the out-
put of machinery and equipment increased 19.3%,
transport vehicles 15.9%, and non-metal mineral
products 10.8%. The output of rubber and plastic
goods rose by a solid 23%. As for the types of ac-
tivity that ensure consumer demand, there was a
fall in the production of textile and clothing and
leather and footwear, while food production con-
tinued to increase (6.1%). The acceleration of
growth in producer prices in these types of activ-
ity in 2007 increased the inflationary pressure on
the consumer goods market.
Agricultural production increased 3.3% year
on year (as against 3.6% in 2006). There was a
rise in the output of major livestock products: live-
stock and poultry production increased 8.6% and
milk production rose 2.3%. As a result, the output
of meat and meat products increased 9.2% in
2007 year on year (of which the production of
meat, including premium-quality by-products,
grew 14.6%) and milk production was up 0.2%.
Gross grain output in 2007 exceeded the
previous year’s level by 4%. However, the produc-
tion of sunflower fell 12.3% and sugar beet 6.6%.
As a result, domestic producers may become in-
creasingly dependent on imported raw materials
and this dependence amid growth in import prices
may increase the inflationary pressure on the do-
mestic consumer goods market.
The rate of production capacity utilisation
has increased persistently in recent years. The Cen-
tre for Economic Studies has estimated that the
rate of production capacity utilisation in industry
stabilised at 70% in the second and third quarters
of 2007, exceeding by 2 percentage points the
2006 Q3 rate. The highest capacity utilisation rate
was registered at the pulp-and-paper enterprises
specialising in the book publishing and printing
business (80%) and enterprises turning out rub-
ber and plastic products (79%) and other non-
metal mineral products (77%). The lowest capac-
ity utilisation rate was registered at enterprises
producing foodstuffs (63%) and coke and petro-
leum products (62%).
Estimates show that the production gap be-
tween actual and potential output was positive in
2007, which is a sign of high inflationary pressure
in the economy.
Labour market
One factor of the acceleration of inflation
was the acceleration of growth in the number of
people employed in the economy, which affected
demand and cost dynamics. It has been estimated
that this growth accelerated by 2.5% in 2007 (as
against 0.8% in 2006). As output grew consider-
ably faster, labour productivity increased by an
estimated 5.5% (as against 6.5% in 2006), re-
straining price growth in the economy.
12 Source: Federal Customs Service.
152007 Q4
Inflation Dynamics
It has been estimated that unlike the situa-
tion a year earlier, in 2007 labour productivity in
the services sector increased more rapidly than in
the manufacturing sector and production growth
in the services sector far surpassed production
growth in the manufacturing sector. The number
of people employed in the services sector in-
creased year on year, whereas the manufacturing
sector registered a fall in job numbers.
As in the previous years, real wage grew
faster (by 16.2%) than labour productivity. The
gap between real wage and labour productivity
growth rates widened compared with the previ-
ous year and contributed to the inflationary
trends.
The share of wages in the GDP structure by
source of income expanded from 44.1% in 2006
to 44.8% in 2007.
Wages continued to differ widely in differ-
ent types of activity. The highest average monthly
wage in January-November 2007 was registered
in the financial sector (33,812 rubles) and the min-
ing sector (27,092 rubles). These exceed the na-
tional average by 2.6 times and 2.1 times, respec-
tively. The lowest wages were registered in agri-
culture, hunting and forestry (5,947 rubles), the
textile and clothing industry (6,275 rubles) and the
production of leather and leather goods and foot-
wear (6,968 rubles). These made up, respectively,
45.5%, 48% and 53.3% of the national average
monthly wage. Below-average wages were char-
acteristic of the types of activity that were funded,
to a large extent, from the federal budget (edu-
cation, utility, social and other services and
healthcare).
The number of unemployed, calculated ac-
cording to the ILO-recommended methodology,
fell by an estimated 12.7% in 2007 (as against 5.1%
in 2006). The total number of jobless stood at
6.2% of the economically active population (as
against 7.2% in 2006).
2007 Q4
Exchange rate
The main factor that shaped the situation
on the domestic foreign exchange market in the
fourth quarter of 2007 was the favourable exter-
nal economic conditions, which ensured the inflow
of a large amount of foreign exchange earnings
due to the high level of energy prices. Judging by
the evaluation of Russia’s balance of payments for
2007, the current account surplus amounted to
$22.1 billion in October-December 2007 (in the
third quarter it stood at $15.8 billion). In addition,
unlike the situation in the third quarter, when in-
stability on world financial markets provoked an
outflow of capital from Russia and the terms of
borrowing abroad deteriorated, in the fourth
quarter the private sector registered a net capital
inflow of $23.5 billion, according to preliminary
data.
On the domestic forex market the Bank of
Russia remained the net buyer of foreign ex-
change, cushioning fluctuations of the operational
benchmark — cost of the bi-currency basket,
whose composition remained unchanged from
the third quarter (0.45 euros and 0.55 US dollars).
Russia’s international reserves grew more than in
the previous quarter ($51.0 billion and $19.5 bil-
lion, respectively). Over the year they increased by
$172.7 billion (in 2006 they grew by $121.5 billion)
Monetary Conditions
and as of January 1, 2008, they stood at $476.4
billion.
The nominal ruble/dollar rate gained
more in the fourth quarter than in the third (3.5%
as against 1.4%) and as a result in 2007 the ruble
appreciated 6.3% against the dollar (4.0% in
2006). While in the first three weeks of October
the dollar retained its positions against the ruble
on the whole, later it started to lose ground. This
trend was the result of the dollar’s depreciation
on the international market caused by the expec-
tations of the fallout of the mortgage credit crisis
and predictions of growth in the ECB and Federal
Reserve interest rate differential as the eurozone
economy experienced increased inflationary pres-
sure. In the last week of November and the first
half of December the dollar/ruble exchange rate
fluctuated slightly, sometimes due to technical
exchange rate readjustments, until the dollar be-
gan gradually to appreciate after a number of US
officials claimed that growth would resume in the
real sector of the US economy after the Federal
Reserve cut its key interest rate. However, the re-
lease of negative statistics on the housing market
by the US Department of Commerce and the in-
creased uncertainty on world financial markets in
the last week of December caused the dollar to
take a deep plunge against other major world cur-
172007 Q4
Monetary Conditions
rencies. As a result, at the end of the fourth quar-
ter the ruble rose to 24.55 against the dollar.
The nominal ruble/euro rate fell by 1.9%
in the fourth quarter as compared with the third
(in the third quarter it slipped by 0.5%). The overall
reduction of the nominal rate of the ruble against
the euro stood at 2.6% on an annualised basis (in
2006 the ruble appreciated 3.3% against the
euro).
The nominal rate of the ruble against the
bi-currency basket gained 0.6% in the fourth
quarter (as against 0.4% in the third), mainly due
to the significant rise in the nominal ruble/dollar
rate in that period. The nominal rate of the ruble
against the bi-currency basket in 2007 gained
0.6%.
The nominal effective rate of the ruble
fell by 0.6% in the fourth quarter (it was down
0.1% in the third). In 2007 as a whole it fell by
about 0.6%, whereas in 2006 it gained 3.3%. The
real effective rate of the ruble gained 0.7% in
the fourth quarter (1.2% in the third) and 4.2%
on an annualised basis (9.4% in 2006). Since in-
flation in Russia in the fourth quarter was higher
than in the countries that are its leading trading
partners, the slowing of growth in the real effec-
tive rate was the immediate result of the fall in
the nominal effective rate of the ruble.
The real ruble/dollar rate appreciated
6.2% in the fourth quarter (3.2% in the third),
while in 2007 as a whole the ruble’s real gain
against the dollar stood at 12.8% (it was 10.7% in
2006). The relative contribution of the nominal
ruble rate and Russian inflation to the strength-
ening of the real ruble/dollar rate gradually be-
came more even during the year. In the fourth
quarter the real rate of the ruble made the big-
gest gain of the year, which was equally due to
the significant acceleration of price growth in the
Russian economy and the rise in the nominal
ruble/dollar rate.
The ruble/euro real exchange rate gained
0.6% in the fourth quarter (1.4% in the third) and
in 2007 as a whole the ruble gained 4.2% against
the euro in real terms (11.5% in 2006). Domestic
inflation remained the main factor of ruble/euro
real exchange rate dynamics.
The weakening of the US dollar in the fourth
quarter contributed to the slowing of consumer
price inflation in Russia by about 0.17 percentage
points. However, its effect was largely offset by
the strengthening of the nominal rate of the euro
against the ruble in the fourth quarter. As a re-
sult, the slight increase in the nominal rate of the
ruble against the bi-currency basket in October-
December 2007 brought about the slowing of
domestic price growth by about 0.04 percentage
points. At the same time, taking into consideration
that the exchange rate influences inflation during
a long period of time, it is important to emphasise
that the overall downward pressure on inflation
by bi-currency basket dynamics in the fourth quar-
ter will continue into the first half of this year and
as a result it will not amount to more than 0.1 per-
centage points.
2007 Q4
On the international currency market the dollar de-
preciated against the currencies of most of Russia’s trading
partners in 2007. It lost the most against the Turkish lira and
Brazilian real and the least against the Japanese yen and Brit-
ish pound. Compared to December 2006, in December 2007
the dollar lost more than 10% against the euro, over 6%
against the yuan and nearly 4.5% against the yen. The de-
valuation of the dollar against the euro resulted from the fall
in the yield on the dollar-denominated financial assets as com-
pared with the yield on the euro-denominated assets. The
dollar’s weakening in the second half of the year was due to
the mortgage crisis in the United States. To scale down cur-
rency interventions on the foreign exchange market, the
People’s Bank of China on May 18, 2007, broadened the range
of the yuan’s intraday fluctuations against the dollar from
+/-0.3% to +/-0.5%. After that and until the end of 2007
the yuan had appreciated 5% against the dollar and since July
21, 2005, when the yuan revaluation began, the yuan had
gained more than 13% against the dollar. The Ukrainian
hryvnia remained unchanged against the dollar in 2007, just
as the Belarusian ruble remained virtually unchanged against
the dollar.
Interest rates
Money market and Bank of Russia interest
rates
The objective of the US Federal Reserve was to main-
tain stability in the financial sector and avert the risk of an
economic slowdown. In the period from September to De-
cember 2007, it cut the benchmark federal funds rate from
5.25% to 4.25% p.a. The European Central Bank in the first
half of 2007 raised the refinancing rate from 3.5% to 4%
p.a., but later it left it unchanged due to increased risks in the
financial sector. The Bank of England in late 2007 switched
from raising the refinancing rate to cutting it. Denmark, Swe-
den, Switzerland, Poland, the Czech Republic, Japan, China,
South Korea and India raised interest rates to curb inflation.
Some countries, such as Hungary, Slovakia, Turkey, Indone-
sia, Thailand and the Philippines, where the monetary policy
helped reduce inflation, lowered interest rates. LIBOR rates
fell by 0.3-0.8 percentage points on the dollar-denominated
deposits with terms from one month to one year in 2007 (De-
cember on December 2006) while rising by 0.9-1.1 percent-
age points on the euro-denominated deposits. By the end of
the year LIBOR rates on the dollar-denominated deposits with
terms longer than six months had fallen below LIBOR rates
on the euro-denominated deposits with the same terms1.
Interest rates that set the limits of the Bank
of Russia interest rate band remained unchanged
in the fourth quarter of 2007. The overnight credit
rate was 10% p.a. (it remained unchanged in the
third quarter too). Interest rates on standard ‘tom-
next’ deposit operations was 2.75% p.a. (on Au-
gust 14 it was raised by a quarter of a percentage
point). The lowest interest rate at the one-day
repo auctions remained unchanged from the third
quarter at 6%.
The average weighted one-day repo auction
rate ranged from 6.03% to 6.70% p.a. in Octo-
ber-December (in August-September it varied be-
tween 6.04% and 6.50% p.a.). The average
weighted interest rate at the four seven-day auc-
tions held during that period ranged from 6.55%
to 6.85% p.a. (at the August 28 auction it was
6.99% p.a.)
The average weighted yield at the deposit
and Bank of Russia bond (OBR) auctions held in
the fourth quarter of 2007 was higher than in the
third as the Bank of Russia set higher cut-off rates.
1 Source: Reuters.
192007 Q4
Monetary Conditions
The average weighted four-week deposit auction
interest rates ranged from 4.01% to 4.19% p.a.
(3.20% to 4.16% p.a. in the third quarter) and the
average weighted three-month deposit auction
rates varied between 4.90% and 4.95% p.a.
(3.79% and 4.13% p.a. in the third quarter). The
average weighted yield at the Bank of Russia bond
auctions ranged from 5.06% to 5.30% p.a.,
whereas in the third quarter it varied between
4.14% and 5.09% p.a.
Bank of Russia operations to provide
liquidity to credit institutions from August
to December 2007
In the second half of August, when the US mortgage
crisis destabilised world financial markets, the Russian money
market experienced a shortage of rubles. This could be seen
from the rise in the level of interest rates on the Russian in-
terbank loan market, their increased volatility, the increased
interest taken by credit institutions in Bank of Russia refinanc-
ing operations and the significant reduction in the volume of
deposit and Bank of Russia bond operations.
The deterioration of the situation on international fi-
nancial markets was accompanied by the reduction of capi-
tal inflow (Russian balance of payments figures indicate that
in August-September 2007 banking sector net capital out-
flow reached a two-year high. In that situation the Bank of
Russia in the second half of the year, especially in August and
September, scaled down dramatically its currency interven-
tions, which in the previous years had had a decisive effect
on the dynamics of the autonomous factors of liquidity and
provided a substantial part of liquidity to the banking sector.
The Bank of Russia provided most of liquidity
through repo auctions. From August to December banks
received a total of 7.4 trillion rubles through repo auctions,
whereas in 2006 as a whole banks received 2.0 trillion rubles
in this manner. Most of these funds were provided in August
(1.86 trillion rubles), October (1.33 trillion rubles) and Novem-
ber (2.92 trillion rubles). In addition, at the end of November
the Bank of Russia began to conduct repo operations at fixed
rates—8% for one day and 7% for one week. The volume of
these operations totalled 6.6 billion rubles in November-De-
cember.
Funds provided to banks through other refinanc-
ing operations increased significantly. From August to
December 2007, the value of overnight loans increased to 86.3
billion rubles as against 47 billion rubles during the entire year
2006.
In August-November, the Bank of Russia conducted
currency swap transactions with credit institutions, which
amounted to 7.6 billion dollars and 200 million euros (200
million dollars in 2006). To efficiently regulate banking sec-
tor liquidity and maintain stability on the domestic forex mar-
ket, the Bank of Russia on October 11 cut its currency swap
interest rate from 10% to 8%.
2007 Q4
The value of Lombard loans extended in August-De-
cember also increased. The total value of one-week and two-
week Lombard loans in that period reached 22.2 billion rubles
at the average weighted interest rate of about 7% (6.1 billion
rubles in 2006). In addition to the existing procedure for ex-
tending Lombard loans, the Bank of Russia on November 28
allowed banks to take Lombard loans for one calendar day at
the fixed interest rate of 8%.
Moreover, to maintain banking sector liquidity, the Bank
of Russia in August-December extended long-term loans
with a term of up to six months at the interest rates of 7-
9% and also bought securities from banks to put them in its
own portfolio and repurchased a large amount of Bank of
Russia bonds (OBR) on the secondary market.
Taking into consideration the ruble liquidity situation,
the Bank of Russia on October 11 lowered for three months
the following required reserve ratios: from 4.0% to 3.0%
for credit institutions’ obligations to private individuals in
rubles and from 4.5% to 3.5% for obligations to non-resi-
dent banks in rubles and foreign currency and other obliga-
tions of credit institutions. This enabled credit institutions to
use a part of their reserve funds. On November 1, the Bank of
Russia raised the required reserve averaging ratio from 0.3 to
0.4.
To expand the refinancing of credit institutions, the
Bank of Russia in the same period extended the Lombard
list by including in it several new types of securities. In Octo-
ber it lowered by two notches the requirements for the bond
issuer international rating, which should be no lower than B+
according to the Standard & Poor’s and Fitch Ratings classifi-
cation or B1 according to the Moody’s classification. As a re-
sult, by the end of 2007, the Bank of Russia had included in
its Lombard list more than 50 new securities issues and in-
crease significantly potential security for the refinancing op-
erations.
In addition, the Bank of Russia increased the correction
factors used in calculating the value of securities accepted as
collateral for Bank of Russia loans and reduced the discounts
used in conducting repo transactions with the Bank of Rus-
sia.
As a result of the liquidity control measures taken by
the Bank of Russia, by the end of December the interest rate
on overnight ruble loans on the interbank market had fallen
close to the level registered in April-July. In addition, they al-
lowed the banking system to maintain growth in credit to the
economy at a level no lower than that registered in first half
of the year.
Bank interest rates on overnight ruble
loans on the interbank loan market remained
within the Bank of Russia interest rate band in the
fourth quarter and only on December 27 the rate
fell by 12 basis points below the ‘tom-next’ de-
posit rate. The overnight ruble MIACR range of
fluctuations narrowed to 2.63-8.32% p.a. in the
fourth quarter from 2.15-10.09% p.a. in the third.
The average MIACR on overnight ruble-denomi-
nated loans stood at 5.43% p.a. in the fourth
quarter as against 4.94% p.a. in the third. In 2007,
the average MIACR on overnight ruble loans stood
at 4.43% p.a. as against 3.42% p.a. in 2006. The
overnight ruble MIACR range of fluctuations in
2007 was higher (2.02-10.09%) than in 2006
(0.78-9.82%), but it became narrower by 97 ba-
sis points. Growth in the level of interest rates as
compared with the previous periods, which con-
tinue to fluctuate within a wide range, is the natu-
ral reaction of the domestic market to the in-
creased cost of the external funding for credit in-
stitutions.
Folded cumulative frequency distribution
curves were used to analyse the deviations of
money market short-term interest rates (MIACR
rates
2 and overnight interdealer repo rates3) from
interest rates on the largest Bank of Russia op-
erations (deposit and repo rates
4). Taking into
consideration the development of the liquidity
2 Average weighted interest rate on overnight interbank ruble-denominated loans on the Moscow market (extended mostly with-
out security).
3 Average weighted interest rate on overnight interdealer repo operations in the securities sector of MICEX (bonds on the Bank of
Russia Lombard List are used as security).
4 Interest rate on ‘tom-next,’ ‘spot-next’ and ‘call’ deposits, which sets the lower limit of the Bank of Russia interest rate band, has
been used as the deposit rate. Average weighted overnight repo auction rate has been used as the repo rate. On days when Bank
of Russia did not conduct repo operations the lowest possible repo rate (6%) was assumed as the repo rate.
212007 Q4
Monetary Conditions
situation in the banking sector in 2007, the year
was divided into two periods, one from January 9
to August 15 and the other from August 16 to De-
cember 29.
The period from the beginning of 2007 to
the middle of August was characterised by excess
liquidity. MIACR dynamics largely followed Bank
of Russia deposit interest rate dynamics. This is
confirmed by the fact that the absolute value of
the median deviation of MIACR from the ‘tom-
next’ deposit rate (0.9 percentage points) in that
period was smaller than it was after August 15 (2.9
percentage points).
The MIACR median deviation from the Bank
of Russia repo rate decreased significantly in the
period after August 15 and stood at –0.4 percent-
age points as against –2.6 percentage points in
the period before August 15. This change shows
that banks have become more active in using refi-
nancing operations and similar dynamics of de-
viations of the average weighted overnight
interdealer repo rate, which characterises the
short-term secured credit market, from the Bank
of Russia key rates confirm this conclusion.
The period after August 15 is also
characterised by the increased volatility of devia-
tions of interbank market rates from Bank of Rus-
sia rates. The volatility of MIACR deviations from
the Bank of Russia deposit rate was considerably
lower in the period from January 9 to August 15:
in that period 80% of deviations had an interval
of 2.6 percentage points, whereas in the period
from August 16 to December 29, 80% of devia-
tions had an interval of 4.1 percentage points.
Growth in deviation volatility was due to the in-
creased uncertainty on the money market.
The dynamics of the spread between rates
on secured loans (interdealer repo rate) and un-
secured loans (MIACR) testified to the increased
instability on the interbank market and the in-
creased uncertainty of its participants in the sec-
ond half of 2007. The increased volatility of the
spreads and the fact that the interest rates on
unsecured loans had risen far more than the in-
terest rates on secured loans indicate that the
market had become more uncertain and one of
the consequences of this uncertainty was growth
in risk premiums.
2007 Q4
The deterioration of the external funding
conditions also affected longer-term interbank
credit rates. The average monthly interest rate on
the interbank ruble-denominated loans with terms
from one month to three months, which ranged
from 5.7% to 6.5% p.a. in January-July, rose to
7.7% p.a. in September. The interest rate on the
ruble-denominated interbank loans with terms
from three to six months increased from 6.0-
8.0% to 8.7% p.a. in that period and the interest
rate on interbank loans with terms from six to 12
months grew from 7.2-9.5% to 10.4% p.a.
The September level of interest rates on
loans with terms longer than one month remained
unchanged until the end of the year, despite the
fact that interest rates on interbank loans with
terms of up to one month had fallen significantly
in December. As a result, the spread between in-
terest rates on interbank ruble loans with terms
of three to six months and overnight loans stood
at 4.8 percentage points in December (the aver-
age annual spread was 3.0 percentage points). The
increase in risk premiums on longer-term loans
may indicate that uncertainty remains on the in-
terbank loan market.
The rise in the general level of interbank
money market rates, for its part, affected to some
extent the cost of bank credit to non-financial
enterprises.
The average interest rate on short-term
loans to non-financial enterprises rose by 91 basis
points in the fourth quarter as compared with the
232007 Q4
Monetary Conditions
2006, in 2007 the average interest rate on house-
hold deposits with terms of up to one year
dropped by 63 basis points to 7.24% p.a., whereas
the rate on one- to three-year household depos-
its rose by 50 basis points to 8.62% p.a.
Asset prices
For most of the fourth quarter yields on the
federal loan bond (OFZ) market demonstrated
a downward dynamics while trade turnovers on
the secondary market
5 contracted by almost 40%
quarter on quarter. By the end of the fourth quar-
ter the OFZ market portfolio effective indicator
had sunk by 7 basis points as compared with the
end of the previous quarter and stood at 6.53%
p.a. The average quarterly market portfolio effec-
tive indicator lost 2 basis points and stood at
6.58% p.a. The 2007 market portfolio effective
indicator shed 22 basis points as compared with
2006 and stood at 6.59% p.a.
The OFZ yield curve retained its rising direc-
tion in the fourth quarter, although its inclination
decreased, reflecting the fall in yields on govern-
ment bonds with maturity of more than 2 years in
2007. This change indicates that the inflationary
expectations of investors who put their money in
medium- and long-term domestic government
debt instruments have abated slightly.
The Russian stock market demonstrated
a price uptrend in the fourth quarter of 2007. In
the middle of December, Russia’s major stock in-
third and reached 10.72% p.a. and the long-term
credit rate increased by 38 basis points to 11.39%
p.a. However, compared to 2006, 2007 saw the
average interest rate on short-term loans to non-
financial enterprises fall by 40 basis points to
10.01% p.a. and on long-term loans by 98 basis
points to 11.51% p.a.
Compared to the third quarter, the fourth
quarter saw the yield curve for loans to non-fi-
nancial enterprises move up all along its length,
while its rising sector extended to the term of up
to three years. This change reflects growth in risk
premiums on loans amid credit market partici-
pants’ persistent inflationary expectations.
The average interest rate on loans to
households with terms of up to one year rose by
130 basis points in the fourth quarter as compared
with the third and stood at 19.65% p.a. and the
rate on loans with terms longer than one year in-
creased by 2 basis points to 14.81% p.a. Compared
to 2006, in 2007 the average interest rate on loans
to households with terms of up to one year fell by
44 basis points to 18.62% p.a. and the rate on
loans with terms longer than one year dropped by
166 basis points to 15.13% p.a.
The average interest rate on household
deposits with terms of up to one year in the fourth
quarter rose by 21 basis points as compared with
the third and stood at 7.22% p.a., whereas the rate
on deposits with terms of one year to three years
fell by 79 basis points to 7.70% p.a. Compared to
5 In the main course of trade, excepting technical transactions.
2007 Q4
dices RTS and MICEX reached historical highs and
their average quarterly levels surpassed the third-
quarter levels by 13% and 9%, respectively. The
prices of telecommunications and communica-
tions stocks and metallurgy and oil and gas sector
shares rose at the most rapid rates in the fourth
quarter, while other share prices grew more
slowly. On average, the leaders of price growth in
2007 were the shares of industrial, power engi-
neering, metallurgy and financial sector compa-
nies, whereas the prices of oil and gas shares de-
clined.
Growth in share prices in October-Decem-
ber 2007 was due to the escalation of capital in-
flow to the domestic stock market in the fourth
quarter of the year. The main impetus for invest-
ment in Russian stocks and shares amid reports
about Russia’s good macroeconomic performance
was the fact that they were undervalued due to
the weak share price dynamics of the first half of
the year and the price fall in the middle of the third
quarter, caused by the crisis on the world finan-
cial market. Given the situation, growth of prices
for Russian stocks and shares could resume. How-
ever, the demand for Russian stocks and shares
was largely stimulated by speculative investors,
who made short-term investments for the pur-
pose of fixing their profits at the end of the year.
This created conditions for a major price readjust-
ment on the Russian stock market in the first quar-
ter of 2008.
Monetary aggregates
The analysis of monetary aggregate dynam-
ics reveals a number of sustained trends that have
evolved in the past few years and continued in
2007.
One key factor of growth in the demand for
money is, as before, rapid economic growth, es-
pecially the acceleration of growth in domestic
demand, which began in the second half of 2005.
This process continues significantly to affect
growth in the economy’s transactional needs in
money. Estimates show that in 2007 domestic de-
mand increased at the most rapid rate in recent
years and this growth made the biggest contribu-
tion to the acceleration of growth in the demand
for money. Another major factor of the demand
for money is, as before, the dynamics of the ex-
change rate of the ruble, especially against the US
dollar, which has commonly been used in Russia
as an alternative store of value. In addition, it
should be noted that wealth creation in the Rus-
sian economy, which is accompanied by growth
in asset prices
6, is yet another factor of the in-
creased demand for money. All these consider-
ations allow one to conclude that the acceleration
of growth in the demand for money, which started
in late 2005, continued in 2007.
Actual M2 dynamics amid massive capital
inflow/outflow were to a great extent the result
of the actions taken by the monetary authorities
6 A sharp rise in prices on the housing market in the second half of 2006 and early 2007 may also serve as an indicator for growth
in asset prices.
252007 Q4
Monetary Conditions
to maintain the managed floating exchange rate
and the corresponding change in net foreign as-
sets. This became particularly obvious in 2007. As
the inflow of foreign exchange increased, mostly
through the capital account, and currency inter-
ventions reached record levels, the annual rate of
growth in monetary aggregate M2 had reached
almost 60% by June 1, 2007. In the second half of
August instability on world financial markets be-
gan to make it increasingly difficult for Russian
banks and corporations to borrow abroad and in
the third quarter of the year this created a net
outflow of capital from the private sector and, as
consequence, led to the significant scaling down
of currency interventions. As a result, the annual
rate of M2 growth had slowed down since Au-
gust 2007 and as of January 1, 2008, it stood at
47.5%.
Nevertheless, despite the slowing of growth
in the money supply in the second half of 2007, it
continues to increase rapidly. As monetary gaps
remained on positive ground for most of the year,
the risk of growth in the money supply persisted
and this may affect price stability in the medium
and long term.
In 2007, as in the previous years, the big-
gest contribution to M2 growth was made by
monetary aggregate M1 (cash in circulation and
demand deposits), which largely reflects the
transactional needs in the economy. As for the M1
structure, the most rapid rates of growth were
demonstrated by the demand deposits (these are
mostly created from non-financial enterprise
funds), which started to increase significantly in
2005. Overall, in 2007 M1 growth was markedly
faster than a year earlier.
Non-financial enterprise ruble accounts
have been growing since 2005 amid growth in in-
vestment and, consequently, credit activity. In
April-May 2007, there was a surge in annual rates
of growth (by more than 80%) as non-financial
enterprises accumulated funds in their current
accounts to participate in auctions and IPOs. Sub-
sequently, this growth slowed down due to some
extent to the completion of the auction transac-
tions and the beginning of YUKOS debt payments
2007 Q4
to the budget. In November, growth in enterprise
accounts accelerated as budget funds were trans-
ferred to the development institutions.
Last year saw the beginning of the reversal
of the trend in the dynamics of annual growth in
time deposits, in which household time deposits
account for 70-80%. The period of their sustain-
able growth in 2005 and 2006 was followed by a
slowdown in 2007. The slowing of growth was
mostly demonstrated by one- to three-year
household deposits. It was probably due to the
persistently high rates of growth in consumer
credit, which discouraged people from keeping
their money in bank accounts, and growth in
household investments in alternative sources of
stores of value, the most popular of them being
the unit investment funds. In addition, the period
of continuous decline in household foreign cur-
rency deposits in 2006 ended and their growth
began in 2007, which may be due to the flow of
funds from ruble to foreign currency deposits.
The dynamics of the total value of foreign
currency deposits in 2007 were volatile. The ma-
jor surges in annual growth rates in March and
December mostly reflected the corresponding in-
crease in foreign currency deposits in non-finan-
cial enterprises. Nevertheless, as the process of
de-dollarisation continued in 2007, the share of
foreign currency deposits in the structure of the
M2X monetary aggregate contracted from 11.4%
to 9.3%.
Credit aggregates
Several sustainable trends have
characterised the dynamics of credit aggregates7
since the second half of 2006.
Loans extended to individuals remain the
most rapidly growing component. In the past four
years they increased by an annualised 81.5% on
average. At the same time, since the second half
of 2006 their growth has been slowing down and
as of January 1, 2008, it stood at an annualised
57.1% as against 75.3% a year earlier. It should be
noted that the share of housing loans has been
expanding in total household loans in the past two
years and it has increased even in the period after
August 2007.
7 Credit aggregates in rubles and foreign currency are considered here and below.
272007 Q4
Monetary Conditions
Although real estate prices remain a major
factor of housing loan dynamics, this kind of loans
continues to grow at extremely rapid rates, even
in real terms.
Despite the slowing of growth in credit to
households, total loans extended to non-finan-
cial enterprises and households have increased
since the second half of 2006. This growth was
the result of the dynamics of loans to non-finan-
cial enterprises, which made up the bulk of total
loans (about 60% as of January 1, 2008).
Growth in credit to non-financial enterprises
accelerated significantly (by an annualised 50.6%
as of January 1, 2008, as against 37.8% a year
earlier) was accompanied by the rise in economic
activity, including investment activity. The accel-
2007 Q4
eration of economic growth and fixed capital in-
vestment probably became a major factor of the
increase in the credit activity of non-financial en-
terprises.
In the second half of 2007, the borrowing
conditions deteriorated slightly and this became
manifest in the rise in interest rates on the domes-
tic and foreign credit market, which remained a
major source of additional funds for Russian com-
panies. These changes, however, had no marked
effect on credit dynamics in August-November
2007. In December growth in credit to non-finan-
cial enterprises slowed on an annualised basis
from 54.3% as of December 1, 2007, to 50.6% as
of January 1, 2008.
292007 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
prices**
Service price
growth
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
Full year (December
on December) 9.0 7.8 8.7 8.5 10.3 6.0 5.7 13.9
January 1.7 0.6 0.9 0.6 4.1 0.4 0.4 4.7
February 1.1 0.5 0.8 0.5 3.6 0.3 0.4 2.6
March 0.6 0.5 0.8 0.5 3.2 0.4 0.4 0.6
April 0.6 0.5 0.8 0.5 3.1 0.4 0.4 0.5
May 0.6 0.3 1.0 0.1 7.8 0.4 0.3 0.5
June 1.0 0.4 1.7 0.4 12.2 0.3 0.3 0.6
July 0.9 0.9 1.4 1.4 1.9 0.4 0.4 0.6
August 0.1 1.1 -0.6 1.6 -16.1 0.6 0.5 0.5
September 0.8 1.6 1.0 2.2 -8.8 0.8 0.8 0.4
October 1.6 2.1 3.3 3.5 0.9 0.9 0.9 0.1
November 1.2 1.1 1.9 1.5 6.2 0.9 0.8 0.6
December 1.1 0.9 1.6 1.2 5.6 0.7 0.5 0.9
Full year (December
on December) 11.9 11.0 15.6 14.9 22.2 6.5 6.4 13.3
* Excluding vegetables and fruit.
** Since March 2005 - Bank of Russia estimate.
Note: Tables 1 to 7 are based on Rosstat data and Bank of Russia calculations.
2007 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
prices**
Service price
growth
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
January 1.7 0.6 0.9 0.6 4.1 0.4 0.4 4.7
February 2.8 1.1 1.8 1.1 7.8 0.7 0.8 7.4
March 3.4 1.7 2.6 1.7 11.2 1.1 1.2 8.0
April 4.0 2.2 3.3 2.1 14.7 1.5 1.7 8.6
May 4.7 2.5 4.3 2.3 23.6 1.9 2.0 9.1
June 5.7 3.0 6.1 2.7 38.6 2.2 2.3 9.8
July 6.6 3.9 7.6 4.1 41.2 2.6 2.8 10.5
August 6.7 5.0 7.0 5.8 18.5 3.2 3.3 11.1
September 7.5 6.7 8.1 8.1 8.1 4.0 4.2 11.6
October 9.3 8.9 11.6 11.9 9.0 4.9 5.1 11.7
November 10.6 10.1 13.7 13.5 15.7 5.8 5.9 12.4
December 11.9 11.0 15.6 14.9 22.2 6.5 6.4 13.3
* Excluding vegetables and fruit.
** Since March 2005 - Bank of Russia estimate.
312007 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
prices**
Service price
growth
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
January 8.2 7.7 7.6 8.0 3.1 6.0 5.7 12.3
February 7.6 6.9 5.3 6.6 -5.1 5.8 5.6 14.2
March 7.4 6.7 4.9 6.2 -5.2 5.8 5.6 14.0
April 7.6 6.8 5.4 6.3 -1.9 5.9 5.8 13.9
May 7.8 6.7 5.9 6.3 3.0 5.9 5.7 13.8
June 8.5 6.9 7.7 6.6 16.2 5.9 5.7 13.7
July 8.7 7.3 8.3 7.4 15.3 5.9 5.8 13.7
August 8.6 7.8 8.3 8.3 7.5 5.7 5.8 13.4
September 9.4 8.7 10.0 10.0 10.2 5.8 6.1 13.4
October 10.8 10.3 13.6 13.4 15.9 6.0 6.3 13.1
November 11.5 10.9 14.9 14.4 19.8 6.3 6.4 13.2
December 11.9 11.0 15.6 14.9 22.2 6.5 6.4 13.3
* Excluding vegetables and fruit.
** Since March 2005 - Bank of Russia estimate.
2007 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 0.4 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
January 0.2 0.1 1.2 0.2 1.7 0.5 1.2
February 0.4 0.3 1.8 0.3 2.8 0.9 1.9
March 0.6 0.4 2.0 0.4 3.4 1.3 2.1
April 0.8 0.5 2.1 0.6 4.0 1.7 2.3
May 0.8 0.7 2.3 0.9 4.7 1.9 2.7
June 1.0 0.8 2.4 1.5 5.7 2.3 3.4
July 1.5 0.9 2.6 1.6 6.6 3.0 3.6
August 2.1 1.1 2.7 0.7 6.7 3.9 2.8
September 3.0 1.4 2.9 0.3 7.5 5.3 2.3
October 4.3 1.7 2.9 0.3 9.3 7.0 2.3
November 4.9 2.0 3.1 0.6 10.6 7.9 2.7
December 5.4 2.3 3.3 0.9 11.9 8.7 3.2
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in the calculation of the core consumer price index.
332007 Q4
Statistical Addendum
Table 5
Monthly inflation growth due to price change
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 0.4 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
January 0.2 0.1 1.2 0.2 1.7 0.5 1.2
February 0.2 0.1 0.7 0.1 1.1 0.4 0.7
March 0.2 0.1 0.1 0.1 0.6 0.4 0.2
April 0.2 0.1 0.1 0.1 0.6 0.4 0.2
May 0.1 0.1 0.1 0.3 0.6 0.2 0.4
June 0.2 0.1 0.2 0.6 1.0 0.3 0.6
July 0.5 0.1 0.2 0.1 0.9 0.7 0.2
August 0.6 0.2 0.1 -0.8 0.1 0.8 -0.7
September 0.8 0.3 0.1 -0.4 0.8 1.3 -0.5
October 1.3 0.3 0.0 0.0 1.6 1.6 0.0
November 0.5 0.3 0.2 0.2 1.2 0.8 0.4
December 0.5 0.2 0.2 0.2 1.1 0.7 0.5
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in the calculation of the core consumer price index.
2007 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 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 37.8 3.2 67.3 32.7
December 36.5 22.5 36.4 4.5 67.1 32.9
January 13.4 8.3 69.0 9.3 29.5 70.5
February 14.9 9.2 65.3 10.6 31.3 68.7
March 17.8 11.6 58.1 12.5 38.3 61.7
April 19.5 13.5 52.9 14.0 42.8 57.2
May 18.0 14.3 48.4 19.3 41.6 58.4
June 17.6 13.6 42.8 26.0 40.4 59.6
July 22.9 13.9 39.3 23.9 45.8 54.2
August 31.7 16.9 40.8 10.6 58.5 41.5
September 39.3 18.7 37.9 4.1 69.9 30.1
October 46.6 18.6 31.1 3.7 75.4 24.6
November 46.3 19.2 28.8 5.7 74.5 25.5
December 45.6 19.4 27.8 7.2 72.8 27.2
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in the calculation of the core consumer price index.
352007 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 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 No estimate 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 34.7 29.1 19.3 16.9 74.1 25.9
December 39.6 19.0 23.2 18.2 64.4 35.6
January 13.4 8.3 69.0 9.3 29.5 70.5
February 17.1 10.6 59.7 12.6 34.2 65.8
March 31.4 22.7 24.5 21.4 70.7 29.3
April 29.9 24.5 22.6 23.0 69.6 30.4
May 8.4 19.5 20.6 51.6 34.4 65.6
June 15.8 10.7 17.0 56.5 35.1 64.9
July 55.9 15.7 17.4 10.9 79.2 20.8
August 725.2 251.6 162.3 -1,039.0 1,016.5 -916.5
September 99.9 33.4 14.7 -48.0 160.7 -60.7
October 78.5 18.2 1.2 2.1 99.3 0.7
November 43.6 23.6 13.3 19.5 67.8 32.2
December 39.2 21.6 19.1 20.1 56.7 43.3
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in the calculation of the core consumer price index.
2007 Q4
Table 8
Russia's key macroeconomic and financial indicators
Year Q1 Q2 Q3 Q4
Macroeconomic indicators
GDP
over period since start of year, billion rubles
2005 4,479 9,652 15,524 21,625
2006 5,662 11,988 19,236 26,883
2007 6,566 14,213 23,066 32,989
over period since start of year, as % of corresponding period of
previous year
2005 105.0 105.3 105.8 106.4
2006 105.0 106.1 106.3 107.4
2007 107.9 107.9 107.8 108.1
as % of corresponding quarter of previous year
2005 105.0 105.6 106.6 108.0
2006 105.0 107.0 106.8 107.8
2007 107.9 107.8 107.6
Industrial output indices
as % of corresponding quarter of previous year
2005 103.2 103.6 104.1 104.9
2006 103.0 106.0 103.8 103.0
2007 108.4 106.7 104.9 105.6
over period since start of year, as % of corresponding period
of previous year
2005 103.2 103.4 103.6 104.0
2006 103.0 104.4 104.2 103.9
2007 108.4 107.7 106.6 106.3
Agricultural output
as % of corresponding quarter of previous year
2005 100.3 101.1 103.7 101.4
2006 102.1 101.8 101.4 110.4
2007 103.4 104.3 103.0 103.1
over period since start of year, as % of corresponding period
of previous year
2005 100.3 100.9 102.7 102.3
2006 102.1 101.9 101.6 103.6
2007 103.4 104.0 103.4 103.3
Fixed capital investment
over period since start of year, billion rubles
2005 540.5 1,316.8 2,310.4 3,611.1
2006 636.5 1,622.1 2,868.4 4,580.5
2007 866.5 2,265.1 3,992.7 6,418.7
as % of corresponding quarter of previous year
2005 106.3 108.4 111.4 114.3
2006 105.7 114.7 113.0 117.2
2007 120.1 123.8 119.6 120.9
Retail trade turnover
over period since start of year, billion rubles
2005 1,511.1 3,185.9 4,982.7 7,040.9
2006 1,853.2 3,916.9 6,149.4 8,693.4
2007 2,234.9 4,751.3 7,521.9 10,757.8
as % of corresponding quarter of previous year
2005 110.5 113.8 113.3 113.5
2006 111.2 113.4 115.1 115.1
2007 113.8 114.8 115.8 115.8
Federal budget on accrual
basis, as of end of period
revenue
billion rubles
2005 1,196.4 2,386.4 3,681.7 5,127.2
2006 1,399.1 2,938.1 4,561.0 6,278.9
2007 1,421.9 3,245.7 5,087.6 7,779.1
as % of GDP
2005 26.7 24.7 23.7 23.7
2006 24.7 24.5 23.7 23.3
2007 21.7 22.8 22.1 23.6
expenditure
billion rubles
2005 671.1 1,444.2 2,519.7 3,514.3
2006 823.2 1,854.7 2,866.5 4,284.8
2007 945.6 2,169.7 3,464.3 5,983.0
as % of GDP
2005 15.0 15.0 16.2 16.2
2006 14.5 15.5 14.9 15.9
2007 14.4 15.2 15.0 18.1
Federal budget surplus on accrual basis, as of end of period
billion rubles
2005 525.3 942.2 1,162.1 1,612.9
2006 575.9 1,083.4 1,694.6 1,994.1
2007 476.3 1,076.1 1,623.2 1,796.1
as % of GDP
2005 11.7 9.7 7.5 7.5
2006 10.2 9.0 8.8 7.4
2007 7.3 7.6 7.1 5.5
Note. Table 8 is based on data compiled by the Bank of Russia, Federal State Statistics Service and on Federal Treasury reporte d
data. From April 2006, pursuant to Bank of Russia Ordinance No. 1660-U, dated February 17, 2006, the calculation of interest
rates on bank lending and deposit operations includes data reported by bank branches.
372007 Q4
Statistical Addendum
Table 8 (continued)
Year Q1 Q2 Q3 Q4
Socio-economic indicators
Nominal imputed average
monthly per employee wage
rubles
2005 7,638 8,234 8,674 9,651
2006 9,397 10,401 10,949 12,203
2007 11,876 12,993 13,494 15,699
as % of corresponding quarter of previous year
2005 122.6 122.4 123.9 126.2
2006 122.3 125.1 125.1 125.2
2007 127.3 125.9 124 129.3
over period since start of year , as % of corresponding period
of previous year
2005 122.6 122.4 123 126.9
2006 122.3 123.7 124.1 124.3
2007 127.3 126.6 125.7 126.7
Real imputed average monthly
per employee wage
as % of corresponding quarter of previous year
2005 108.4 107.6 110 113.4
2006 110.3 114.3 114.3 114.8
2007 118.2 116.6 113.9 116.1
Household money income per capita monthly average, rubles
2005 6,583.2 7,766.8 8,148.7 9,864.4
2006 8,187.7 9,919.9 10,238.2 12,304.9
2007 9,852.2 11,898.3 12,639.7 15,570.5
Household real disposable
money income
as % of corresponding quarter of previous year
2005 105.9 115.1 114.0 114.1
2006 109.8 115.3 114.3 113.5
2007 109.6 108.7 111.4 110.8
over period since start of year, as % of corresponding period
of previous year
2005 105.9 109.8 110.8 112.4
2006 109.8 112.7 113.3 113.3
2007 109.6 109.1 110.0 110.4
Household spending,
as % of income
purchase of goods and payment of services
2005 73.1 69.4 71.2 66
2006 73.1 67.7 70.9 65.6
2007 74.0 69.2 71.1 65.7
compulsory payments and contributions
2005 9.0 9.5 10.6 10.7
2006 10.8 10.3 10.4 10.5
2007 12.8 12.5 12.0 13
growth in savings
2005 13.0 10.3 9.2 9.7
2006 11.1 10.7 8.3 11.3
2007 9.8 8.5 6.9 10.2
foreign exchange purchase
2005 7.6 8.0 9.0 9.1
2006 7.5 7.0 7.2 6.0
2007 5.3 5.3 5.2 5.2
cash on hand
2005 -2.7 2.8 0 4.5
2006 -2.5 4.3 3.2 6.6
2007 -1.9 4.5 4.8 5.9
Average imputed pension total, rubles
2005 2,125 2,324 2,467 2,540
2006 2,539 2,727 2,800 2,839
2007 2,846 3,091 3,108 3,299
Real imputed pension
as % of corresponding quarter
of previous year
2005 106.6 108.2 110.6 112.6
2006 107.8 107.2 103.7 102.5
2007 104.1 104.9 102.0 104.3
over period since start of year,
as % of corresponding period
of previous year
2005 106.6 107.4 108.5 109.6
2006 107.8 107.5 106.1 105.1
2007 104.1 104.5 103.6 103.8
Total number of unemployed (calculated by ILO methodology)
million
2005 6.0 5.5 5.4 5.5
2006 5.7 5.5 5.0 5.0
2007 5.2 4.5 4.3 4.5
as % of economically active
population
2005 8.2 7.4 7.3 7.5
2006 7.8 7.4 6.7 6.8
2007 7.0 6.0 5.7 5.9
2007 Q4
Table 8 (continued)
Year Q1 Q2 Q3 Q4
Foreign economic activities
Price of Urals crude
over period since start of year, $/barrel
2005 43.1 45.4 49.3 50.4
2006 57.7 61.1 62.5 60.9
2007 54.0 59.7 64.0 69.5
as % of corresponding period of previous year
2005 146.4 146.1 148.2 145.6
2006 134.0 134.7 126.7 120.9
2007 93.5 97.7 102.4 114.1
Exports of goods
over period since start of year, $ billion
2005 50.2 109.8 174.7 243.8
2006 67.4 143.9 223.8 303.9
2007 72.0 156.1 245.7 355.2
as % of corresponding period of previous year
2005 134.6 136.4 135.4 133.1
2006 134.2 131.1 128.1 124.7
2007 106.9 108.4 109.8 116.9
Imports of goods
over period since start of year, $ billion
2005 25.7 55.1 87.6 125.4
2006 31.0 69.8 112.6 164.7
2007 43.1 95.5 153.5 223.1
as % of corresponding period of previous year
2005 129.1 128.6 129.1 128.8
2006 120.6 126.6 128.6 131.3
2007 139.0 136.8 136.3 135.4
Current account (over period since start of year), $ billion
2005 20.1 42.4 62.5 84.4
2006 30.3 54.6 78.3 94.3
2007 22.9 38.8 54.5 76.6**
Net capital outflow (inflow) by private sector (over period since start of year), $ billion
2005 1.7 -3.6 4.5 0.1
2006 -5.5 15.1 27.7 42.0
2007 13.5 66.4 58.8 82.3**
Foreign investment in Russia's non-financial
sector (Rosstat data)
over period since start of year, $ billion
2005 6.0 16.5 26.8 53.6
2006 8.8 23.4 35.3 55.1
2007 24.6 60.3 87.9
as % of corresponding period of previous year
2005 97.6 86.9 92.1 132.4
2006 146.0 141.9 131.7 102.7
2007 280.0 260.0 250.0
Of which
direct
total, $ billion
2005 1.9 4.5 6.6 13.1
2006 3.8 6.4 10.3 13.7
2007 9.8 15.8 19.6
as % of corresponding period of previous year
2005 130.0 131.0 118.1 138.8
2006 200.0 143.6 155.5 104.6
2007 250.0 250.0 191.3
portfolio
total, $ billion
2005 0.1 0.2 0.4 0.5
2006 0.2 0.5 0.7 3.2
2007 0.2 1.1 1.5
as % of corresponding period of previous year
2005 89.9 135.2 160.5 136.3
2006 290.0 290.0 182.3 700.0
2007 85.8 220.0 230.0
other
total, $ billion
2005 4.0 11.8 19.9 40.1
2006 4.7 16.5 24.4 38.2
2007 14.7 43.4 66.7
as % of corresponding period of previous year
2005 87.3 76.7 85.2 130.5
2006 117.2 139.1 122.8 95.3
2007 310.0 260.0 270.0
Russia's international reserves (as of end of period), $ billion
2005 137.4 151.6 159.6 182.2
2006 205.9 250.6 266.2 303.7
2007 338.8 405.8 425.4 476.4
Real ruble exchange rate indices,
last month of quarter (as % of December
of previous year)***
ruble vs. dollar
2005 4.7 3.3 2.3 3.9
2006 6.9 10.0 12.1 16.7
2007 2.3 3.8 8.1 15.0
ruble vs. euro
2005 6.8 14.7 14.2 18.8
2006 6.5 4.9 6.0 5.6
2007 3.1 4.1 4.5 5.8
effective rate
2005 5.1 8.7 8.3 10.5
2006 6.2 7.0 7.9 7.4
2007 2.7 3.3 3.8 5.1
392007 Q4
Statistical Addendum
Table 8 (continued)
Year Q1 Q2 Q3 Q4
Financial market indicators (including Sberbank rates)
Average for period
Overnight interbank credit rate, % p.a.
in rubles
2005 1.2 3.0 2.3 4.6
2006 3.2 2.8 2.6 5.1
2007 3.9 3.4 4.9 5.4
in US dollars
2005 2.3 2.8 3.3 3.9
2006 4.4 4.8 5.2 5.2
2007 5.2 5.2 5.1 4.6
OFZ yields****, % p.a.
2005 7.9 8.0 7.7 7.1
2006 6.8 6.9 6.8 6.7
2007 6.6 6.6 6.6 6.6
Interest rate on household time deposits,
% p.a.
up to 1 year in rubles
2005 9.5 8.6 8.5 8.4
2006 8.3 8.0 7.6 7.7
2007 7.4 7.3 7.0 7.2
over 1 year in rubles
2005 8.4 7.9 6.2 6.4
2006 7.6 5.1 5.2 5.4
2007 7.9 7.5 7.1 6.8
up to 1 year in US dollars
2005 5.6 5.7 5.6 5.6
2006 5.6 5.7 5.7 5.9
2007 5.4 5.3 5.2 5.2
over 1 year in US dollars
2005 6.1 5.6 5.8 5.5
2006 6.2 4.7 5.0 5.5
2007 6.8 6.6 6.4 7.0
Interest rate on credit to non-financial
institutions, % p.a.
up to 1 year in rubles
2005 10.6 10.7 10.3 11.0
2006 10.4 10.8 10.3 10.4
2007 9.9 9.6 9.8 10.7
over 1 year in rubles
2005 13.0 11.7 12.9 12.1
2006 12.7 12.9 12.5 12.1
2007 12.1 11.5 11.0 11.4
up to 1 year in US dollars
2005 7.9 8.6 9.0 8.8
2006 8.6 8.4 8.6 8.5
2007 8.7 8.8 8.4 9.1
over 1 year in US dollars
2005 9.6 9.6 10.4 10.4
2006 10.5 10.2 10.4 10.0
2007 10.3 10.1 9.3 9.8
Interest rate on ruble promissory notes discounted by banks, % p.a.
2005 10.9 10.6 9.9 10.0
2006 12.9 8.7 9.2 9.7
2007 9.5 8.9 10.8 10.8
MICEX rate in 'tomorrow' trades, rubles/$
2005 27.8560 28.1012 28.5150 28.7151
2006 28.0733 27.1897 26.8053 26.5910
2007 26.1795 25.8599 25.5043 24.6527
As of end of quarter
RTS index, points
2005 669.07 706.38 1,007.76 1,125.60
2006 1,434.99 1,494.63 1,549.99 1,921.92
2007 1,935.72 1,897.70 2,071.80 2,290.51
Refinance rate, % p.a.
2005 13 13 13 12
2006 12 11.5 11.5 11
2007 10.5 10 10 10
2007 Q4
Table 8 (end)
Year 1.01 1.04 1.07 1.10
Monetary indicators
M0, billion rubles
2006 2,009.2 1,928.8 2,233.4 2,400.8
2007 2,785.2 2,741.2 3,027.5 3,220.9
2008 3,702.2
M2, billion rubles
2006 6,044.7 6,169.4 7,090.8 7,750.7
2007 8,995.8 9,412.6 10,857.7 11,494.0
2008 13,272.1
Net foreign assets of monetary authorities and credit institutions, billion rubles
2006 4,867.9 5,433.6 6,221.1 6,281.9
2007 6,927.5 7,988.8 8,787.8 9,129.7
2008 9,915.0
Domestic claims, billion rubles
2006 4,460.8 4,129.4 4,256.2 4,944.1
2007 5,727.7 5,696.9 6,241.6 6,670.5
2008 8,224.3
Money (monetary survey definition), billion rubles
2006 3,858.5 3,855.9 4,479.3 4,856.1
2007 5,598.4 5,774.3 6,676.5 7,088.4
2008 7,974.3
Quasi-money (monetary survey definition), billion rubles
2006 3,362.6 3,537.0 3,825.5 4,041.1
2007 4,548.3 5,120.2 5,352.7 5,605.4
2008 6,653.8
Foreign currency deposits, billion rubles
2006 1,178.2 1,225.9 1,221.0 1,153.2
2007 1,155.4 1,490.6 1,183.7 1,212.4
2008 1,366.1
Broad monetary base, billion rubles
2006 2,914.2 2,721.4 3,287.0 3,486.0
2007 4,122.4 4,210.2 5,139.1 4,587.2
2008 5,513.3
Balances in correspondent accounts, billion rubles
2006 508.6 320.0 430.9 443.7
2007 638.1 518.1 528.7 576.3
2008 802.2
M2 velocity
annual average
2006 4.4 4.3 4.1 4.0
2007* 3.8 3.6 3.4 3.2
2008* 3.1
change since start of year, %
2006 -6.5***** -2.2 -5.9 -9.3
2007* -13.2***** -5.9 -12.0 -15.8
2008* -18.8*****
Monetisation of the economy (by M2 aggregate), %
2006 22.7 23.2 24.1 25.0
2007* 26.1 27.8 29.7 31.0
2008* 32.2
Money multiplier
by broad monetary base
2006 2.07 2.27 2.16 2.23
2007 2.18 2.24 2.11 2.51
2008 2.41
change since start of year, %
2006 13.2***** 9.3 4.0 7.3
2007 5.2***** 2.5 -3.2 14.8
2008 10.3*****
Foreign exchange rates
rubles per UD dollar
2006 28.78 27.70 26.94 26.78
2007 26.33 26.01 25.82 24.95
2008 24.55
rubles per euro
2006 34.19 33.63 34.24 33.98
2007 34.69 34.69 34.72 35.35
2008 35.93
* Preliminary data.
** Estimate.
*** Appreciation of the ruble (+), depreciation of the ruble (-).
**** Effective indicator of the OFZ market portfolio.
***** Relative to start of
previous year.
© The Central Bank of the Russian Federation, 2008
Research and Information Department