CBR Quarterly Inflation Review - Q3 2007
Central bank: cbr | Type: quarterly_review | Date: 2007-09-30

THE CENTRAL BANK
OF THE RUSSIAN FEDERATION
(BANK OF RUSSIA)
Quarterly
Inflation
Review
2007 Q3
Research and Information Department
Introduction........................................................... 1
Inflation Dynamics ................................................... 2
Monetary Conditions.............................................. 14
Statistical Addendum ............................................. 23
The electronic version of Quarterly Inflation Review is available on the Bank of Russia's website :

12007 Q3
Inflation Dynamics
Introduction
In the third quarter of this year inflation con-
tinued due to expanding domestic demand and
the powerful supply shocks caused by growth in
the prices of some foodstuffs on world commod-
ity markets.
Economic growth in Russia in January-Sep-
tember 2007 was faster than in the same period
of 2006 but the increase in domestic demand did
not match producers’ capability for non-inflation-
ary growth in output. According to estimates, ac-
tual output this year surpassed its potential, ac-
celerating inflation in the economy.
As wage rose faster this year than last year,
the share of wage costs in the value added has
expanded. Price growth accelerated in the fuel and
energy production sector and producer prices
went up in the sectors oriented to the consumer
goods market (food production and the produc-
tion of textile and clothing and leather, leather
goods and footwear). These processes show that
cost-push inflation is a significant factor.
Inflation in the countries that are the major
exporters of goods to Russia, monitored allowing
for their relative importance for Russian imports,
in January-September 2007 accelerated as com-
pared with the same period of 2006 (this year’s
nine-month average relative to last year’s nine-
month average) and this created conditions for
the accelerated price growth in the Russian
economy.
Some food prices rose at particularly rapid
rates in January-September 2007, especially in the
third quarter, following the general food price
uptrend in the world.
Compared to December 2006, consumer
price growth in September 2007 (7.5%) was faster
than in the same period of 2006, making the at-
tainment of the 6.5-8% target for inflation in-
creasingly difficult. The inflationary expectations
have increased in this situation.
The monetary conditions of the economy in
July-September changed from the first half of the
year. The August subprime mortgage crisis in the
United States caused the price of credit to rise on
the international market, stimulating the outflow
of capital from Russia. As a result, the Russian fi-
nancial market experienced a relative shortage of
liquidity, accompanied by growth in domestic in-
terest rates. In that situation the Bank of Russia
had to conduct active operations to provide liquid-
ity to credit institutions. In addition, it took steps
to increase potential security for its loans and repo
operations, giving credit institutions wider access
to the refinancing instruments. Banks withdrew a
large part of funds from their deposit accounts
with the Bank of Russia even though the latter had
raised its minimum deposit interest rates.
The third quarter saw the slowing of growth
in monetary indicators. Broad money growth
slowed to 31.6% as of October 1, 2007, and M2
growth was down to 48.3%. In the third quarter
of this year, M2 growth slowed for the first time
after a long period (two years) of accelerating
growth but it was faster than the demand for
money forecast for 2007 in Guidelines for the
Single State Monetary Policy in 2008 (37-39%).
It also exceeded the revised forecast, raised to 40-
44% on faster-than-expected economic growth.
The high rates of overall growth in the money sup-
ply stimulate the inflationary expectations, while
the continued slowing of M2 growth may reduce
the risk of inflation by the end of next year (due
to the inevitable lags). The reduction of the veloc-
ity of money due to the de-dollarisation, the ex-
pansion of the share of the savings component
and the contraction of the share of cash in the
ruble supply structure also mitigate the inflation-
ary consequences of growth in the money supply.
2007 Q3
Consumer price inflation (%)
Growth
(September 2007
on December 2006)
Growth
(September 2006
on December 2005)
Prices of goods and services, total 7.5 7.2 Acceleration of growth
by 0.3 percentage points
Of which:
- food prices 8.1 6.7 Acceleration of growth
by 1.4 percentage points
- food prices, excluding vegetable and fruit prices 8.1 6.6 Acceleration of growth
by 1.5 percentage points
- non-food prices 4.0 4.3 Slowing of growth
by 0.3 percentage points
- prices of paid services provided to households 11.6 12.0 Slowing of growth
by 0.4 percentage points
Prices of goods and services included in core inflation calculation 6.7 5.9 Slowing of growth
by 0.8 percentage points
Source: Rosstat.
Inflation Dynamics
Consumer prices
According to the Federal State Statistics Ser-
vice (Rosstat), in the nine months of this year con-
sumer prices rose 7.5%, or by 0.3 percentage
points more than in January-September 2006. In
the first quarter they increased 3.4%, in the sec-
ond 2.2% and in the third 1.8%. In September 2007
consumer prices grew 9.4% year on year and in
January-September 2007 they gained 8.2% as
compared with the same period in 2006.
The acceleration of inflation was due to core
inflation, which stood at 3.7% in the third quar-
ter of this year as against 1.7% in the first and 1.2%
in the second. In the nine months of this year it
accelerated to 6.7% from 5.9% in the same pe-
riod last year. In September 2007, core inflation
stood at an estimated 8.7% year on year.
Estimates show that growth in the prices of
goods and services included in the core consumer
price index calculation accounted for 5.3 percent-
age points, or 69.9%, of overall consumer price
growth in January-September 2007 (as against 4.6
percentage points, or 63.4%, in the same period
last year).
Growth in food prices, excluding veg-
etable and fruit prices, made the biggest contri-
32007 Q3
Inflation Dynamics
Food price inflation (%)
Growth (September 2007
on December 2006)
Growth (September 2006
on December 2005)
Food products 8.1 6.7 Acceleration of growth
by 1.4 percentage points
Bread and bakery products 20.0 7.6 Acceleration of growth
by 12.4 percentage points
Cereals and legumes 15.9 11.0 Acceleration of growth
by 4.9 percentage points
Pasta 13.8 3.8 Acceleration of growth
by 10.0 percentage points
Meat and poultry 5.4 3.9 Acceleration of growth
by 1.5 percentage points
Fish and seafood 5.9 5.7 Acceleration of growth
by 0.1 percentage points
Milk and dairy products 12.0 4.6 Acceleration of growth
by 7.4 percentage points
Butter 17.1 4.0 Acceleration of growth
by 13.1 percentage points
Sunflower oil 17.2 -1.2
Granulated sugar 0.2 37.3 Slowing of growth
by 37.1 percentage points
Vegetables and fruit 8.1 8.2 Slowing of growth
by 0.1 percentage points
Alcoholic beverages 5.2 7.4 Slowing of growth
by 2.2 percentage points
Source: Rosstat.
bution to the acceleration of inflation. In the nine
months of this year they gained 8.1%, whereas in
the same period last year they rose 6.6%. Accord-
ing to estimates, growth in these prices in Janu-
ary-September 2007 accounted for 3.0 percent-
age points, or 39.2%, of overall consumer price
growth. In the same period last year these prices
accounted for 2.6 percentage points, or 35.7%,
of overall consumer price growth; of this, growth
in the prices of bread and bakery products and milk
and dairy products was responsible for an esti-
mated 0.8 percentage points, or 10.2%, of over-
all consumer price growth.
Growth in food prices excluding vegetable
and fruit prices accelerated in September (by
2.2%) when prices of fat, milk and dairy products
rose significantly, reflecting the increase in do-
mestic and world demand for food products amid
limited capabilities for production growth. The
production of vegetable oil in Russia fell by 1.7%
in January-September 2007, as compared with the
same period a year earlier. The output of dairy
products remained unchanged from the previous
year, but the production of low-fat dairy prod-
ucts decreased by 12.9% in terms of skimmed milk,
and whole milk powder, cream and ice cream
powder 4.4%. Domestic flour production dropped
3.7% and the output of bread and bakery prod-
ucts was down 2% and pasta 6.2%.
Grain product prices increased the most in
the first half of the year. In the nine months of
2007 the price of sunflower oil soared 17.2%,
whereas in the same period of 2006 it fell 1.2%.
The price of butter went up 17.1% as against 4.0%
a year earlier, milk and dairy products 12.0% as
against 4.6% and bread and bakery products 20%
as against 7.6%.
Vegetable and fruit prices gained 8.1% in
the nine months of this year, or 0.1 percentage
points less than in the same period of 2006. Ac-
cording to estimates, as a result of growth in veg-
etable and fruit prices the general level of con-
sumer prices rose by 0.3 percentage points, or
4.1% of overall consumer price growth, in Janu-
ary-September 2007, whereas in the same period
last year the respective figures stood at 0.3 per-
centage points and 4.5%.
Overall food price growth in the nine
months of this year stood at 8.1% as against 6.7%
in January-September 2006.
As in the previous years, non-food prices
grew more slowly than the prices of other major
types of consumer goods and services. In the nine
months of this year non-food prices increased 4%
(as against 4.3% in January-September 2006).
The prices of building materials and tobacco prod-
ucts rose at the most rapid rates (13.6% and 5.7%,
2007 Q3
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.
respectively). In the same period last year these
prices increased 8.2% and 4.6%, respectively.
Prices of paid services provided to house-
holds gained 11.6% in the nine months of this year
(as against 12% in the same period of 2006). Es-
timates show that growth in service prices in that
period accounted for 2.9 percentage points, or
37.8%, of overall consumer price growth (2.9 per-
centage points, or 39.6%, in January-September
2006).
Housing and utility prices rose 13.3% in
January-September 2007 as against 16.8% in the
same period last year. Communications fees in-
creased 10.8% as against 1.8% a year earlier due
to significant growth in the city telephone service
charges. Overall growth in the regulated service
prices stood at an estimated 11.8% in the nine
months of the year, a decrease of 0.4 percentage
points from the same period a year earlier.
Growth in service prices in January-Septem-
ber 2007 increased overall consumer price growth
by 5.5 percentage points (as against 6.3 percent-
age points in the same period last year).
According to Rosstat, in the nine months of
this year consumer prices rose more than in the
same period last year in all federal districts, ex-
cept the Urals, Far Eastern and Siberian.
Judging by estimates, the differences be-
tween the Russian regions in terms of the price of
the fixed set of goods and services used by Rosstat
for the interregional comparisons of the purchas-
ing power of the population narrowed in January-
September 2007. The regional difference ratio
decreased to 42.4% from 45.3% in that period.
Non-food prices grew almost at the same
rate (from 3.7% to 4.6%) in all federal districts in
January-September 2007. Meanwhile, the rates of
growth in vegetable and fruit prices differed sig-
nificantly region by region. In the Northwestern
Federal District, for example, these prices rose
11.8%, whereas in the Siberian Federal District their
growth stood at 0.6%.
Growth in service prices slowed down in
most of the federal districts in the nine months of
this year, as compared with the same period last
year. The Siberian and Volga Federal Districts were
the only exceptions.
Housing prices
Housing prices continued to rise faster than
inflation. In the third quarter of this year housing
prices on the primary market increased 15.6%, as
compared with the fourth quarter of 2006
2, and
14.9% on the secondary market. Nevertheless, this
represents a slowdown from last year’s 35.7% and
36.1%.
Growth in housing prices was slowing amid
rapid growth in the construction of new housing,
which stood at 131.3% in January-September 2007
as compared with the same period last year.
Producer prices
Industrial producer prices rose 17% in the
nine months of this year (as against 15.2% in the
same period last year). Their growth accelerated
as producer prices in the mining sector increased
36.4% in that period as against 25.8% in Janu-
ary-September 2006. In the fuel and energy sec-
tor producer price growth quickened to 40.5%
from 26.3%. Meanwhile, producer prices in the
metal ore mining sector rose 8.2% as against
33.1% in January-September 2006. Growth in pro-
ducer prices in the mining sector in the nine
months of this year accounted for an estimated
8.1 percentage points, or 47.9%, of overall indus-
trial producer price growth. In January-Septem-
52007 Q3
Inflation Dynamics
ber 2006 it accounted for 5.7 percentage points,
or 37.6%.
Price growth in the manufacturing sector
slowed to 10.5% in January-September 2007 from
12.7% in the same period last year.
Growth in producer prices of manufactured
goods that go to the consumer goods market ac-
celerated significantly in January-September 2007
as compared with the same period last year. Tex-
tile and clothing manufacturer prices rose 7.2%
(as against 2.8% in January-September 2006),
prices in the production of foodstuffs, including
beverages and tobacco, increased 11.4% (as
against 5.6% a year earlier) and prices in the pro-
duction of leather, leather goods and footwear
went up 7.1% (as against 6.1%).
In the nine months of this year, prices in the
production, transmission and distribution of elec-
tricity, gas and water gained 15.6% (as against
10.4% in the same period last year).
Freight transportation charges grew
11.6% in January-September 2007, whereas in the
same period of 2006 they increased 26.1%). Rail-
way fares were up 7.7% as against 8.9% a year
earlier.
Communication fees for corporate enti-
ties rose 4.1% in the nine months of this year (as
against 0.5% in the same period last year).
2007 Q3
3 Based on data provided by the US Labor Department’s Bureau of Labor Statistics, the European Communities’ Statistical Office
(Eurostat), China’s National Statistics Bureau and national statistical offices of other countries. Contribution of individual factors
to US and eurozone inflation has been calculated by the Bank of Russia.
4 The rise in the level of prices of goods and services included in the consumer goods basket, except foodstuffs and energy
products.
5 Thirteen member states, including Slovenia. Source: Eurostat.
6 Growth in prices of goods and services included in the consumer goods basket, except foodstuffs, alcoholic beverages, tobacco
and energy products.
Prices in the construction sector increased
12.4% over that period as against 8.7% a year ear-
lier.
Agricultural producer prices gained 9.3%
in January-September 2007 as against 1.2% in the
same period last year. Price growth was registered
in both crop growing and livestock breeding. In the
nine months of this year producer prices in crop
farming rose 16.2% as against 8.0% in the same
period last year. Prices rose especially high for
grains (31.4% as against 16.6% a year earlier) and
potatoes (22.1% as against 17.5%). Livestock pro-
ducer prices went up 4.6% in the nine months of
this year as against 2.7% in the same period of
2006. At the same time, there was a drop in egg
prices by 1.8% as against a fall by 11.7% in Janu-
ary-September 2006.
Inflation in some countries3
Inflation in the countries that are the major
exporters of goods to Russia in the nine months
of 2007 was higher than in the same period of
2006 (September on December of the previous
year). Most of the countries, Russia’s trading part-
ners accounting for a large share of Russian im-
ports, registered the acceleration of price growth.
The biggest contribution to aggregate inflation in
the countries that are Russia’s leading trading part-
ners was made by the acceleration of inflation in
China to 4.4% (from 1% in September 2006 rela-
tive to December 2005), Ukraine to 8.6% (5.9%),
Germany to 1.8% (0.5%), Belarus to 5.4% (3.1%)
and Kazakhstan to 8.6% (5.9%). At the same
time, inflation slowed down in Turkey, some Eu-
ropean countries (Britain, France, Italy and the
Netherlands) and Japan. Growth in food prices,
caused by the rise in the prices of agricultural pro-
duce on the world and domestic markets, had a
major effect on inflation in foreign countries.
US inflation stood at 3.3% in the nine
months of this year (September on December of
the previous year). In September 2006, it stood at
3.1%. Core inflation
4 made the biggest contribu-
tion to the change in the general level of consumer
prices (1.6 percentage points). However, the ac-
celeration of inflation was due to the quickening
of growth in energy prices (from 10.6% in Janu-
ary-September 2006 to 13.2% in the period under
review). US core inflation stood at 2.1% in the nine
months of this year as against 2.5% in the same
period in 2006. The slowing of growth in rent
(from 3.7% to 2.9%) was the main factor of its
reduction.
Eurozone inflation
5 stood at 1.6% in the nine
months of this year as against 1.4% in the same
period last year. Core inflation6 was the major con-
tributor to eurozone consumer price growth (0.7
percentage points). Compared to January-Sep-
tember 2006, core inflation’s contribution in-
creased, while the contribution made by the
change in energy and food prices remained un-
changed. Eurozone core inflation stood at 1% in
January-September 2007 as against 0.7% in the
same period of 2006.
72007 Q3
Inflation Dynamics
7 Average prices are based on data provided daily by the following news agencies and exchanges: Reuters for oil, Petroleum Argus
for petroleum products (petrol, diesel fuel and fuel oil) and the London Metal Exchange for non-ferrous metals (aluminium,
copper and nickel). Average monthly prices of natural gas and ferrous metal price indices are reported by the World Bank and
average monthly prices of other goods by the IMF.
Foreign trade
The price situation for the major Russian
export commodities7 on world markets in January-
September 2007 was good on the whole. World
market prices of Russian exports were higher on
average than in the same period last year: energy
prices were up 1.9% and non-energy prices up
8.2%.
Growth in the price of oil, which resumed in
the middle of January 2007, continued virtually
during the entire period under review and it accel-
erated in the third quarter. The main reasons for
the rise in oil prices on the world market were
faster growth in the world demand for oil, espe-
cially in the rapidly developing countries of Asia,
which exceeded growth in the supply of oil, the
weakening of the US dollar against other major
world currencies, the tough position taken by the
OPEC member countries on the oil production lev-
els (10 OPEC countries, which exclude Iraq and
Angola, had not revised the oil output quotas since
July 2005) and some other geopolitical and cli-
mate-related factors.
As a result, the Bank of Russia has calculated
that the average price of Urals crude in the third
quarter of this year was 11.1% higher than in the
same period last year and stood at $72.5 per bar-
rel. Petroleum product prices were 11.7% higher
on average, whereas the price of natural gas in
Europe was down 4.0%.
In the nine months of this year the world
market price of Russian oil was by 2.4% higher
than in the same period last year and petroleum
product prices were higher by 1.5%, while natural
gas prices in Europe remained virtually unchanged
from January-September 2006.
The world metal market registered a slight
rise in ferrous metal prices in the second and third
quarter of this year, but in the nine months of the
year ferrous metal prices were by 1.7% lower on
average than in the same period of 2006. As for
the non-ferrous metal market, the price of alu-
minium fell 8% and nickel was down 37% in the
third quarter compared with the second, while the
price of copper remained virtually unchanged. In
the nine months of this year non-ferrous metal
prices were higher than in the same period last
year: aluminium and copper were up 7.3% and the
price of nickel increased by 1.9 times. Prices of
other Russian raw material exports, except tim-
ber, were higher than in January-September 2006.
Food price rises on world markets are due
to the reduction of raw material stocks, the un-
usually rapid expansion of demand, which exceeds
growth in output, the increased use of agricultural
raw materials for the production of bio-fuel and
2007 Q3
8 Average prices of raw and refined sugar are based on data published daily by the London Commodity Exchange. Average monthly
prices of grains are based on data reported by the World Bank, beef, pork and poultry by the International Monetary Fund and
sunflower oil by the Russian Market Research Institute’s Bulletin of Foreign Business Information.
growth in freight rates caused by the underpro-
duction of cargo ships. The world’s agricultural
production today makes unrealistic the plans an-
nounced by many countries to replace a part of
mineral fuel by biological fuel and foreign experts
believe that things won’t change for another two
to three years.
Prices of Russia’s major food imports
8 had
different dynamics on world markets in the third
quarter of the year. Calculated on a quarter-on-
quarter basis, prices of wheat, butter, sunflower
oil, milk, poultry and raw sugar increased, the price
of beef remained virtually unchanged, while pork,
refined sugar and corn prices declined.
Growth in grain prices has resumed on the
world market in the past two agricultural years.
According to the World Bank, wheat prices rose
by 1.6 times and corn prices by 1.7 times in June
2007 compared with June 2005. In the third quar-
ter growth in wheat prices accelerated compared
with the previous quarter and stood at 34%. As
for corn prices, they hit a high last February and in
the subsequent months they demonstrated a
weak downward trend. In January-September
2007, the price of wheat and corn on the US mar-
ket was, respectively, by 21% and 46% higher than
in the same period of 2006.
According to International Grains Council
(IGC) estimates, the outlook for the world grain
harvest in the new agricultural year is good, but
weather conditions in some CIS countries, Europe
and the United States have compelled experts to
lower their forecast. In addition, in the third quar-
ter of the year experts expressed concern that the
wheat harvest in Australia might be smaller than
expected and grain harvests in North America and
Africa were affected by bad weather. In Septem-
ber 2007, the IGC lowered again its wheat harvest
forecast and this along with growth in demand in
many importing countries has led to higher prices
(Egypt, Brazil, India, Algeria, Jordan and Morocco
are buying up more and more wheat on the world
market). The Ukrainian government in June placed
a temporary ban and on November 1 set quotas
on wheat exports. The world consumption of corn
is growing rapidly as corn is being increasingly used
in the production of bio-fuel (ethanol). The low-
ering of the wheat harvest forecasts and the re-
strictions imposed on exports by some countries
amid the lowest level of wheat stocks in 30 years
and the expansion of world demand for grains in
the consumer sector as well as industrial produc-
tion create preconditions for further growth in
prices.
Russia’s wheat exports to the world market
are growing: in January-August 2007 they in-
creased 21.2% as compared with the same period
in 2006 while contract export prices rose 64.8%.
At the same time, wheat imports fell by 60% as
the contract price surged 37.7%. Wheat export
volumes exceeded import volumes by 14.4 times
in that period (4.8 times in January-August 2006).
According to the weekly
Oil World, prices of
animal and vegetable fats have been rising fast
on the world market this year. In the United States,
for example, the price of edible animal fats in-
creased 84% in July 2007 year on year, while the
price of refined sunflower oil in Europe soared to
a seven-year high. The price of animal oil grew as
its consumption increased in some major import-
ing countries amid the reduction of its world
stocks. The price of sunflower oil rose on the world
market due to a dramatic fall in output in all pro-
ducer countries in the Northern Hemisphere and
the reduction of the sunflower oil seed process-
ing in the European Union (EU), Ukraine, Russia
and Turkey, the world’s top five sunflower oil pro-
ducers. In addition, the rapidly expanding bio-fuel
market increasingly affects the balance between
the resources and demand for edible animal and
vegetable oils.
Growth in dairy product prices on the world
market is due to the rise in demand in some de-
veloping countries of Asia, North Africa and the
Middle East and such major consumers as the EU
and the United States. According to the
Organisation for Economic Co-operation and De-
velopment (OECD), the world market prices of
milk powder and other dairy products will remain
high in 2007-2008 and in the period until 2016 and
they will be determined by the world economic
situation, especially the rates of economic growth
92007 Q3
Inflation Dynamics
9 From July 1 to June 30 of the next calendar year.
10 The ratio between export and import price indices.
in the countries of Asia, Africa and South America,
rather than short-term factors such as bad
weather, exchange rate fluctuations or produc-
tion problems.
The price of sunflower seeds exported from
EU countries increased by 2.1 times in September
2007 year on year and the price of European sun-
flower oil rose by 1.9 times. Compared with the
third quarter of 2006, in the third quarter of this
year they grew 40% and 36%, respectively. In
January-September 2007, the price of sunflower
oil on this market gained 39% as compared with
the same period last year.
Contract import prices of milk and butter
rose significantly in January-August 2007. Com-
pared with December 2006, they gained 68.5%
and 88.1%, respectively (in August 2006 they fell
14.2% and 1.9%, respectively). In January-August
2007, contract prices of milk and butter increased,
respectively, by 38.1% and 21.7% on average, as
compared with the same period in 2006, while
milk and butter imports contracted 32.0% and
21.1%, respectively.
The slight rise in beef and pork prices in
January-September 2007 shows that this market
has somewhat stabilised. According to foreign
experts’ estimates, the world production of beef
will increase 1.2% in the 2007/2008 agricultural
year
9 and pork 2.7% (in the same period last year
these prices rose 0.8% and 3.2%, respectively).
Growth in poultry prices was due to the expan-
sion of world demand, especially in Asian coun-
tries (China is becoming the world’s leading im-
porter of poultry). Many countries of Africa and
the Middle East are restoring poultry imports to
former levels, while some are increasing them. It
should be noted that after the fall in poultry prices
in 2005-2006, which was largely caused by the
bird flue epidemic that hit more than 40 hitherto
virus-free countries of Europe, the Middle East and
Africa, in the third quarter of this year poultry
prices had just recovered to the 2004 Q3 level.
Consequently, their further growth is very likely.
The price of refined sugar continued to fall
on the world market in the third quarter of the
year, whereas raw sugar prices remained stable.
In the nine months of this year, the price of raw
sugar dropped 41% and refined sugar 34% as
compared with the same period last year.
Despite growth in some import food prices,
import prices in January-September 2007 in-
creased more slowly than export prices. This shows
that the terms of trade between Russia and other
countries
10 were better than in the same period of
2006.
Russia’s trade surplus contracted in January-
September 2007 as compared with the same pe-
riod last year due to the slight increase in exports
and the acceleration of growth in imports. It
shrank by an estimated 15.9% to $93.5 billion,
2007 Q3
11 Based on data compiled by the US Department of Commerce Bureau of Census, Eurostat, China’s Ministry of Commerce and
national statistical offices of other countries.
12 Twenty-seven member countries, including Bulgaria and Romania. Excluding mutual trade between EU member countries.
GDP consumption
(growth as % of corresponding period of previous year)
2005 2006 2007
Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q4 Full year Q1 Q2
GDP 5.0 5.6 6.5 8.0 6.4 5.0 7.0 6.8 7.8 6.7 7.9 7.8
Final consumption 6.7 10.3 10.7 10.9 9.7 7.9 9.1 9.6 10.2 9.3 9.7 10.0
Of which:
- households 9.5 14.0 13.7 13.6 12.8 9.6 10.7 11.6 12.6 11.2 11.9 12.2
Gross capital formation 16.3 0.4 6.6 8.3 7.2 4.0 16.9 10.4 19.7 13.4 34.2 24.5
Net exports -9.9 -8.6 -24.0 -11.1 -12.8 -5.9 -14.3 -22.2 -24.3 -15.8 -21.9 -25.1
- exports 3.5 5.7 5.1 10.6 6.4 9.0 6.4 6.1 7.4 7.2 3.4 5.2
- imports 14.7 14.5 17.8 19.6 17.0 22.9 21.7 19.1 23.2 21.7 25.5 25.8
Source: Rosstat.
whereas in January-September 2006 it grew
27.7% to $111.2 billion).
Foreign trade in some countries11
The EU12 trade deficit contracted by 20.1 bil-
lion euros in January-August 2007 compared with
the same period last year as the value of mineral
fuel and fuel and lubricants imports decreased by
11.1% amid growth in exports of machinery and
equipment. EU imports from Russia declined by
5% in value, mainly as a result of the reduction in
mineral fuel imports. The US trade deficit con-
tracted by $27.6 billion, largely because of the re-
duction in the value of imports of primary com-
modities and materials. There was a fall in the
value of Russian exports to the United States of
ferrous metals and ferrous metal products, alu-
minium, oil and petroleum products. China’s trade
surplus expanded by $67.3 billion, or 1.7 times, due
to export growth. At the same time, growth in
Russian exports to China slowed down in value and
the balance of China’s trade with Russia became
favourable for the first time in the period under
review.
Demand
Domestic demand
Russia’s GDP increased 7.9% in the first half
of this year (in January-June 2006 it grew 6.0%).
Economic growth was due to rapid growth in de-
mand.
The expansion of domestic demand, caused
by growth in incomes in various sectors of the
economy, and the ruble’s appreciation in real
terms stimulated dynamic growth in imports of
both investment and consumer goods. Moreover,
according to Bank of Russia estimates, imports of
investment goods necessary for economic devel-
opment grew a little faster than consumer goods
imports. Growth in consumer goods imports was
largely due to the increased imports of cars,
household gadgets and appliances and other non-
food products.
In January-September 2007, imports of
goods from Asia-Pacific Economic Cooperation
(APEC) member countries, especially China, Japan
and the United States, increased faster than im-
ports in general. Growth in imports from EU coun-
tries, including the eurozone, and CIS was slower
than growth in overall imports.
The share of imported products in the com-
modity structure of retail trade expanded from
44% in the second quarter of 2006 to 45% in the
second quarter of this year, while the share of
imports in food stocks increased from 33% to
36%.
In January-September 2007, as a year ear-
lier, imports of goods grew mainly due to the ex-
pansion of import volumes, which increased sig-
nificantly compared with January-September
2006, whereas growth in import prices acceler-
ated slightly. At the same time, growth in some
import prices creates conditions for price growth
on the domestic market. The value of imports in-
creased significantly as growth in engineering im-
ports, especially cars, and foodstuffs accelerated
compared with January-September 2006.
112007 Q3
Inflation Dynamics
13 Based on data compiled by the US Department of Commerce Bureau of Economic Analysis, Eurostat, China’s National Statistics
Bureau and national statistical offices of other countries.
14 Source: Federal Customs Service.
Growth in expenses on household sector fi-
nal consumption stood at 12.1% in January-June
2007 (10.2% in January-June 2006). Consumer
spending continued to increase rapidly in January-
September 2007, stimulating growth in retail sales.
Retail trade turnover accelerated to 14.8% (from
13.3% in January-September 2006), whereas
growth in the value of paid services provided to
the public slowed down a little (to 7.3% from
7.7%).
Government expenditures on final con-
sumption increased 4.5% in January-June 2007 (in
the same period last year they grew 4.6%). It has
been estimated that in January-September 2007
non-interest federal budget expenditures relative
to GDP were higher than in the same period last
year, which represents an inflation risk factor. At
the same time, the absorption of additional oil
revenues into the Russian Government’s
Stabilisation Fund contained consumer price
growth.
Gross capital formation increased 28.5% in
the first half of this year (in January-June 2006 it
grew 11.2%). There was a marked rise in invest-
ment activity in January-September 2007. Fixed
capital investment increased 21.2% (as against
11.8% in the same period of 2006). Most of the
funds went to the mining sector, transport and
communications.
Investments in machinery, equipment and
transport vehicles accounted for more than a third
of total investment. A fifth was used to import
equipment. Considerable sums invested in ma-
chinery and equipment facilitated the technical
retooling of production, stimulated growth in
labour productivity and created conditions for
controlling price growth.
Fixed capital investments were largely fi-
nanced by raised funds (55.5%) in January-June
2007, of which 16.4% were budget funds. Bank
loans accounted for 9.8% as against 9.3% in Janu-
ary-June 2006.
As imports of goods and services grew con-
siderably faster than exports in January-June
2007, net exports declined by 23.4%.
Foreign demand13
According to estimates based on first-half
reports and forecasts by the IMF, the Commission
of the European Communities and Reuters
agency, the economic situation in the countries
that are Russia’s leading trading partners was good
in January-September 2007. GDP growth rates in
the countries that are major importers of goods
from Russia remained high and mostly unchanged
from January-September 2006. According to es-
timates, GDP growth was higher than in January-
September 2006 in Ukraine, Poland, Italy, Britain,
China, Finland and some other countries in this
group. Preliminary data show that China’s GDP
grew 11.5% in January-September 2007 as com-
pared with the same period last year, when it in-
creased 11.2%. US GDP growth slowed to 2% from
3% a year earlier amid a sharp fall in investments
in housing construction.
Growth in the value of Russian exports of
goods in January-September 2007, as compared
with the same period in 2006, was chiefly due to
the increase in the value of non-energy exports.
The increase in non-energy export prices and the
resumption of growth in the price of oil were ac-
companied by the expansion of export volumes
of oil and most other products, whereas export
volumes of natural gas and ferrous metals con-
tracted. Compared with the first nine months of
2006, exports of goods increased 10.4% to $247.0
billion (calculated according to the balance of pay-
ments methodology). Export volumes grew more
slowly than export prices. Exports to APEC and CIS
countries, especially members of the Eurasian Eco-
nomic Community (EurAsEC), increased consid-
erably faster than exports in general
14 in January-
September 2007. Exports grew particularly in value
to the APEC countries, South Korea and Japan,
whereas the value of exports to China and the
United States decreased. Exports of goods to the
EU countries, including the eurozone countries,
increased slightly. However, exports increased the
most in value to Sweden and Spain and declined
the most to Germany and Italy.
2007 Q3
Supply
Production in the major types of activity in-
creased 8.6% in January-September 2007 as
against 5.7% in the same period last year. The
output of construction products and retail trade
grew at the most rapid rates.
Industrial output grew 6.6% in January-Sep-
tember 2007 as against 4.2% in the same period
of 2006. The manufacturing sector has expanded
its share in the gross value added structure this
year. Growth in output in this sector accelerated
from 4.4% in January-September 2006 to 10% in
January-September 2007. The most rapid rates of
growth were registered in the production of rub-
ber goods and plastics (21.9%), machinery and
equipment (20.9%), transport vehicles (15.7%)
and non-metal mineral products (13.9%). There
was a rise in the output of products that go to the
consumer goods market: food production in-
creased 6.3% and the production of leather and
footwear 4%. However, producer prices in these
types of activity in January-September 2007 were
higher than in the same period last year and put
pressure on overall consumer price dynamics.
The expansion of supply had a favourable
effect on price dynamics in the economy. Agri-
cultural output increased 2.2% in January-Sep-
tember 2007, as compared with the same period
last year (in January-September 2006 it grew
1.6%). There was a rise in the output of major live-
stock products, including cattle and poultry (a rise
of 10.1%). As a result, the output of meat and
meat products increased 9% in January-Septem-
ber 2007, as compared with the same period last
year (this includes the output of meat and top-
quality meat products, which grew 17%). At the
same time, the output of dairy products remained
unchanged from January-September 2006, while
the output of some dairy products fell, adversely
impacting dairy price dynamics on the consumer
goods market.
By the middle of October 2007 farmers had
thrashed 3.4% more grain and 35.2% more corn
than in 2006. However, sunflower and sugar beet
production declined by 14.1% and 4.5%, respec-
tively. This may have a negative effect on the pro-
duction of vegetable oil and granulated sugar and,
consequently, adversely impact their price dynam-
ics in the future.
Estimates show that the utilisation of pro-
duction capacity at key industrial enterprises in the
first half of the year stood at 61%. In the second
quarter the highest utilisation ratio was registered
in the production of coke and petroleum products
(82%) and fuel and energy (80%). The lowest
utilisation ratio was registered at enterprises pro-
ducing machinery and equipment (52%) and tex-
tile and clothing enterprises (48%).
Labour market
Growth in the number of people employed
in the economy has accelerated this year. In Janu-
ary-September 2007, the number of jobholders
rose by an estimated 2.2% as against 0.8% in the
same period last year. Output growth has accel-
erated. As a result, in the nine months of this year
labour productivity increased by an estimated
5.1% as against 5.5% in the same period last year.
Consequently, the intensive factors of growth
have retained their significance, containing price
growth in the economy.
According to estimates, in January-Septem-
ber 2007, as in the previous year, labour produc-
tivity in the production of goods grew faster than
in the services. Growth in the services sector
slightly exceeded growth in the production sec-
tor. At the same time, the number of jobs in the
services sector increased year on year and de-
creased in the production sector.
Real wage grew faster (by 116.2%) than
labour productivity in January-September 2007.
The gap between them became wider than in the
same period last year, creating preconditions for
further growth in prices.
Wages continue to differ widely by type of
activity this year. The highest average monthly
wage was registered in the financial business
(33,691 rubles) and fuel and energy production
(26,472 rubles). It exceeded the national average
by 2.7 times and 2.1 times, respectively. The aver-
age monthly wage was the lowest in agriculture,
hunting and forestry (5,596 rubles), textile and
clothing production (6,021 rubles) and the pro-
duction of leather, leather goods and footwear
(6,680 rubles). It accounted for, respectively,
44%, 47% and 53% of the national average
wage. Wages were below average in budget-fi-
nanced sectors such as education, utility and other
132007 Q3
Inflation Dynamics
public services, including healthcare. However,
wages increased rapidly in these sectors (by 24-
28%).
In the income structure of GDP the share of
wages and salaries expanded from 46.0% to
49.8% in the first half of 2007 as compared with
the same period last year.
The number of unemployed, calculated us-
ing the ILO methodology, fell by an estimated
12.8% in January-September 2007 (it was down
3.4% in the same period last year). The total num-
ber of jobless accounted for 6.3% of the economi-
cally active population (as against 7.3% in Janu-
ary-September 2006).
2007 Q3
Monetary Conditions
Exchange rate
The supply-demand situation on the domes-
tic foreign exchange market in the third quarter
was affected by the net outflow of capital from
the private sector of the Russian economy, regis-
tered for the first time since the first quarter of
2006 and caused by instability on international fi-
nancial markets created by the subprime mort-
gage crisis in the United States. The weakening of
the nominal effective rate of the ruble slowed
down significantly. The Bank of Russia remained
the net buyer of foreign exchange as it conducted
operations on the forex market to prevent sharp
exchange rate fluctuations, but growth in inter-
national reserves has slowed down.
The dollar’s fall against the euro on the in-
ternational currency market brought about the
change in the ruble’s rate against the dollar and
the euro. The exchange rate dynamics in the pe-
riod under review were affected by the increased
likelihood of an interest rate cut in the United
States due to the negative effect of the subprime
mortgage crisis on the financial sector of the US
economy and the risk of adverse macroeconomic
consequences of this crisis. The rate of the ruble’s
appreciation against the dollar and its deprecia-
tion against the euro depended on the use by the
Bank of Russia of the bi-currency basket as an
operational benchmark of its exchange rate policy.
The composition of this basket, whose value is ex-
pressed in rubles, has not changed since the sec-
ond quarter (it is made up of 0.55 dollars and 0.45
euros).
The nominal ruble/US dollar rate gained
1.4% in the third quarter as compared with the
second (in the second quarter it rose 1.7%). The
ruble’s appreciation against the dollar slowed due
to the increased volatility of the dollar/euro rate
on the international market, caused by instability
of the financial market as a whole and the con-
tradictory macroeconomic factors that affected
the exchange rate (on the one hand, there was a
contraction in the US budget and trade deficit, but
on the other hand, the prevailing sentiment about
the short-term outlook for the US economy was
pessimism). In the nine months of this year (Sep-
tember 2007 on December 2006) the ruble appre-
ciated 3.7% against the dollar in nominal terms
and 8.1% in real terms (7.7% and 12.1% in the
same period last year).
The nominal ruble/euro rate slipped 0.5%
in the third quarter of this year as compared with
the second (in the second quarter it was down
1.1%). In the nine months of this year the ruble
depreciated 1.2% against the euro, whereas in real
terms it gained 4.5% due to the difference be-
152007 Q3
Monetary Conditions
tween the rates of inflation in Russia and eurozone
countries. In the same period of 2006, the ruble
appreciated 0.2% against the euro in nominal
terms and 6.0% in real terms.
The nominal effective rate of the ruble
against the currencies of Russia’s major trading
partners inched down 0.1% in the third quarter of
this year as compared with the second (in the sec-
ond quarter it was down 0.6%). In the nine
months of this year it fell 0.5%, whereas in Janu-
ary-September 2006 the nominal effective rate
rose 3.2%. The major factors of the decline of the
nominal effective rate were the ruble’s deprecia-
tion against the euro, Turkish lira, Chinese yuan,
Hungarian forint, Polish zloty, Indian rupee, Bra-
zilian real and Kazakhstan tenge and the slowing
of the ruble’s appreciation against the US dollar,
Ukrainian hryvnia, Belarusian ruble and Japanese
yen.
In the nine months of this year the real ef-
fective rate of the ruble gained 3.8% as against
7.9% in January-September 2006. The slowing of
the rise of the ruble’s real effective rate was caused
not only by the reduction of the nominal effec-
tive rate, but also by the acceleration of inflation
in the countries that are Russia’s major trading
partners, especially in the eurozone, China,
Ukraine, Belarus, Poland and Kazakhstan. At the
same time, the contribution Russian inflation
made to the strengthening of the real effective
rate of the ruble in the nine months of this year
was comparable with the contribution it made
during the entire year of 2006.
Russia’s international reserves increased by
$19.5 billion, or 5%, in the third quarter of this year
(in the third quarter of 2006 they grew by $15.6
billion). In July they increased by $10.3 billion, or
2.5%, whereas in August they decreased by $127
million, or 0.03%. In September international re-
serves grew by $9.3 billion, or 2.2% and as of Oc-
tober 1, 2007, they totalled $425.4 billion, an in-
crease of $121.6 billion, or 40%, since the begin-
ning of the year. In the same period of 2006,
Russia’s international reserves increased by $84
billion, or 46%.
On the international currency market the dollar
depreciated 5% against the euro, 4% against the yuan and
1.8% against the yen in the nine months of 2007 (September
2007 on December 2006). The dollar’s depreciation against
the euro was due to the narrowing of the difference between
US and eurozone interest rates. China continued gradually to
strengthen the yuan against the dollar as part of its managed
floating exchange rate policy. In May 2007, it broadened the
permissible range of intraday yuan/US dollar fluctuations
from +/-0.3% to +/-0.5%. As regards the currencies of
importance for the Russian economy, the US dollar depreci-
ated against the Turkish lira, Indian rupee and Hungarian
forint (in January-September 2006 the dollar appreciated
against these currencies). The dollar also depreciated against
the currencies of most of the other trading partners, but at a
slower pace than in January-September 2006 (except for the
dollar’s depreciation against the Brazilian real and Polish
zloty). The Ukrainian hryvnia and Belarusian ruble remained
unchanged against the dollar.
2007 Q3
Interest rates
In the third quarter of this year, the Bank of
Russia continued to narrow the interest rate
band for its operations. On August 14, it raised
the standard ‘tom-next’ and ‘call’ deposit rate,
which sets the lower limit of the band, from 2.5%
to 2.75% p.a.
Throughout the third quarter of this year the
Bank of Russia repeatedly raised the cut-off rates
at the deposit auctions. At the 4-week deposit
auctions it raised the average weighted interest
rate from 3.20% to 4.16% p.a. (in the second
quarter it ranged from 3.22% to 4.74% p.a.) and
at the 3-month deposit auctions (in July and the
first 10 days of August) from 3.79% to 4.13% p.a.
(in the second quarter they ranged from 4.03%
to 5.02% p.a.). The average weighted yield at the
Bank of Russia bond (OBR) auctions was 4.14-
5.09% p.a. (in the second quarter it was 4.20-
5.17% p.a.).
At the overnight repo auctions the average
weighted interest rate stood at 6.04-6.5% p.a. in
the second part of August and September and at
the 7-day auctions it was 6.99% p.a. As in the sec-
ond quarter, the average weighted Lombard credit
auction interest rate in July-September 2007 stood
at 7.00% p.a.
There was no single interest rate trend on
the Russian financial market in the third quarter
of the year. Credit institutions cut interest rates
on retail operations, while interest rates on opera-
tions conducted with non-financial enterprises for
different terms changed both ways. Interbank
credit market interest rates and yields on govern-
ment securities increased.
Bank interest rates on overnight ruble loans
changed within the Bank of Russia interest rate
band and only in the period from July 2 to 5 they
were lower by 2-35 basis points than the ‘tom-
next’ ruble deposit rates and on September 28 they
were higher by 9 basis points than the overnight
credit rate. The range of fluctuations of the MIACR
on overnight ruble loans widened significantly in
the third quarter (2.15-10.09% p.a.) as compared
with the second (2.43-4.56% p.a.). The average
MIACR on overnight ruble loans rose to 4.94% p.a.
in the third quarter as against 3.34% p.a. in the
second.
The average interest rate on short-term
loans to non-financial enterprises rose by 0.2 per-
centage points to 9.8% p.a., whereas the aver-
age interest rate on long-term loans fell by half a
percentage point to 11.0% p.a.
The yield curve for loans to non-financial
enterprises continued to rise in the up-to-one-year
section and started to descend in the sections
showing the longer-term loans. The yield curve for
loans with terms of up to six months moved up,
whereas the yield curve for loans with terms longer
than six months moved down. The inclination of
the yield curve decreased.
The average interest rate on household loans
with terms of up to one year slipped by 0.1 per-
centage points in the third quarter as compared
172007 Q3
Monetary Conditions
with the second and stood at 18.4% p.a. and the
average interest rate on household loans with
terms longer than one year fell by half a percent-
age point to 14.8% p.a.
The average interest rate on household de-
posits with maturities of up to one year was down
by 0.3 percentage points to 7.0% p.a. and the av-
erage interest rate on household deposits with
maturities of one year to three years declined by
0.4 percentage points to 8.5% p.a.
On the OFZ market, as trade turnover on the
secondary market more than doubled quarter on
quarter, yields tended to rise for most of the pe-
riod under review and only in the last ten days of
September the opposite trend began. As of the
end of the third quarter the effective OFZ market
portfolio indicator climbed by 8 basis points com-
pared with the end of the previous quarter and
stood at 6.60% p.a. The average quarterly effec-
tive market portfolio indicator gained 4 basis
points and reached 6.59% p.a.
The OFZ yield curve continued to rise in the
third quarter but its inclination decreased, reflect-
ing growth in the yield on government bonds with
maturities of up to three years.
The term structure of interest rates by in-
strument remained fairly balanced in the period
under review. As yield curves for the long-term
2007 Q3
15 Based on data provided by the Reuters agency.
instruments became almost flat or started to sink
in the third quarter, it became clear that Russian
financial market participants were awaiting a
slight fall in interest rates on short- and medium-
term ruble-denominated instruments.
The US Federal Reserve cut the benchmark federal
funds rate from 5.25% to 4.75% p.a. in September and to
4.5% p.a. in October. The European Central Bank (ECB) in
March raised its refinance rate from 3.5% to 3.75% p.a. and
in June to 4% p.a. In the nine months of this year (September
2007 on December 2006) the LIBOR on euro-denominated
deposits with terms from one month to one year rose by 0.8-
1.1 percentage points amid the slight change in the rates on
similar deposits denominated in US dollars15. The yield on US
government securities with terms to redemption of two to
three years fell by 0.5-0.7% in September, as compared with
December 2006, and at the end of the month it was below
the yield on similar eurozone financial assets for the first time
since the middle of 2004. The LIBOR on the dollar-denomi-
nated deposits with all maturities and the yield on US trea-
suries with maturities longer than three years in September
were higher than the LIBOR on the euro-denominated de-
posits and the yield on similar eurozone government securi-
ties. However, the spreads narrowed significantly as com-
pared with December 2006 (mainly due to the rise in yields
on the euro-denominated assets).
Money
The monetary aggregate M2 increased
5.9% in the third quarter of this year and due to
the recurrent seasonal factor its growth was
smaller than in the previous quarter (15.4%). The
annualised growth of M2 (against the same date
of the previous year) slowed from 53.1% as of July
1, 2007, to 48.3% as of October 1, 2007. Never-
theless, M2 growth exceeded the forecast of the
2007 money demand made in Guidelines for the
Single State Monetary Policy in 2008 (37-39%)
and its updated version (40-44%) based on faster
economic growth. The rapid fall in the velocity of
money mitigated the inflationary aftermath of
growth in the money supply. In the third quarter
of this year, the velocity of money, calculated on
the basis of the M2 monetary aggregate, de-
creased by 5.3% (in the same period of 2006 it
192007 Q3
Monetary Conditions
decreased by 3.7%). In the first nine months of
this year it was down 17.0% (it was down 9.6% in
the same period of 2006) and calculated on an
annualised basis, it decreased by 20.6% (12.5%
as of October 1, 2006).
The aggregate ‘Money’ in the monetary
survey definition, which includes the most liq-
uid transactional components of the money sup-
ply, reflects the economic situation and liquidity
preferences. In the third quarter of this year these
funds increased 6.2% as against 8.4% in the same
period last year due to the expansion of the cash
component of this aggregate and its non-cash
component, such as household and non-financial
enterprise sector demand deposits. On an
annualised basis, growth in the aggregate ‘Money’
slowed from 49.1% as of July 1, 2007, to 46.0%
as of October 1, 2007.
Demand deposits increased 6.0% in the
third quarter of this year as against 9.5% in the
same period of 2006 and their annualised growth
slowed from 62.3% to 57.2%. The non-cash com-
ponent of the ‘Money’ aggregate was mostly
made up of non-financial enterprise funds and its
expansion reflects, above all, the economic
agents’ rising demand for money to conduct trans-
actions. Growth in non-financial enterprise sec-
tor demand deposits slowed on an annualised ba-
sis from 65.8% to 59.2% in the third quarter of
this year, whereas the annualised growth of
household demand deposits remained almost un-
changed and stood at 49.4% as of October 1,
2007. Non-financial enterprises accounted for
80.4% of total demand deposits as of October 1,
2007.
Cash outside the banks (M0 aggregate)
grew 6.4% in the third quarter of this year as
against 7.5% in the same period last year.
Annualised M0 growth slowed from 35.6% to
34.2%. The share of cash in the structure of the
aggregate ‘Money’ remained unchanged in the
period under review and stood at 45.4% as of
October 1, 2007.
The slowing of the demand for cash in the
third quarter of the year was accompanied by the
reduction of household demand for foreign ex-
2007 Q3
change. Net sales of foreign exchange to house-
holds through the exchange offices of the
authorised banks in July-September 2007 totalled
about $800 million as against $1.4 billion in the
same period last year. Balance of payments data
show that in the third quarter of this year foreign
exchange decreased by $4.7 billion and in Janu-
ary-September by $11.6 billion ($8.4 billion in Janu-
ary-September 2006).
The aggregate ‘Quasi-money’ comprises
less liquid components of the money supply used
by economic agents as savings. In the third quar-
ter of this year this aggregate increased 4.7%
(5.6% in the same period last year) and on an
annualised basis its growth slowed from 39.9%
as of July 1, 2007, to 38.7% as of October 1, 2007
(30.9% as of October 1, 2006). Growth in ‘Quasi-
money’ in the third quarter of this year was due to
the expansion of the ruble component and the
increase in foreign currency-denominated depos-
its. Time deposits denominated in rubles increased
5.3% in the third quarter of this year (as against
10.9% in the same period of 2006) and their
annualised growth slowed from 60.1% to 52.1%.
Foreign currency deposits grew 6.0% in dollar
terms over that period (in the third quarter of 2006
they decreased 4.5%). The share of ruble-de-
nominated time deposits in ‘Quasi-money’ in the
third quarter expanded by half a percentage point
to 78.5%.
Annualised growth in household time de-
posits slowed from 48.4% to 46.3% in the third
quarter, whereas their share in total ruble-de-
nominated time deposits expanded by 1.9 percent-
age points to 75.6% as of October 1, 2007. Growth
in non-financial enterprise sector time deposits
slowed down significantly: from 105.8% as of July
1, 2007, to 73.5% as of October 1, 2007.
The slowing of the annualised rate of M2
growth was largely due to the non-financial en-
terprises sector deposit dynamics. It was also the
result of the slowing of the annualised growth in
cash and household time deposits.
Growth in the money supply, including
foreign currency deposits (M2X aggregate)
stood at 5.5% in the third quarter of this year (it
212007 Q3
Monetary Conditions
was 7.1% in the same period of 2006). In the third
quarter of this year the annualised rate of growth
in the monetary aggregate M2 was higher than
the rate of growth in the monetary aggregate
M2X due to the fall in demand for foreign ex-
change: as of October 1, 2007, M2X annualised
growth stood at 42.7% as against 37.8% as of the
same date a year earlier.
The dollarisation ratio (the share of the
foreign currency component in the money supply
in its monetary survey definition) decreased by 0.2
percentage points in the third quarter of this year
and as of October 1, 2007, it stood at 9.6% (in the
same period last year it fell by 1.7 percentage points
and in 2006 as whole by 4.9 percentage points).
At the same time, the ruble-denominated time
deposits accounted for the largest share in
M2X (34.7% as of October 1, 2007, as against
32.5% as of October 1, 2006).
The principal source of growth in the money
supply that comprises foreign currency deposits
in third quarter of this year was banking sector
domestic claims, which increased by 428.9 bil-
lion rubles as against 688.0 billion rubles in the
same period last year. The dynamics of banking
sector domestic claims were primarily the result
of the increase by 1,191.4 billion rubles in bank
claims on the non-financial enterprise sector and
the reduction by 670.0 billion rubles in the mon-
etary authorities’ net claims on the government.
The monetary authorities’ net foreign assets in-
creased by 159.6 billion rubles in the third quarter
of the year and banking sector net foreign assets
grew by 115.6 billion rubles. As a result, banking
sector net foreign assets increased by 275.1 bil-
lion rubles as against 60.7 billion rubles in the third
quarter of 2006. Consequently, banking sector
claims on non-financial enterprises and house-
holds were the main factor of money supply
growth in the third quarter of this year.
In January-September 2007, growth in
banking sector claims on non-financial enterprises
and households (3,116.4 billion rubles as against
1,791.6 billion rubles in the same period last year)
exceeded the expansion of net foreign assets of
the monetary authorities (2,630.4 billion rubles as
against 1,872.6 billion rubles in January-Septem-
ber 2006). Consequently, the importance of bank
claims on non-financial enterprises and house-
holds as a source of money supply growth had in-
creased in the first nine months of this year.
The capital crunch on the world market in
the third quarter of this year, which became mani-
fest in the reduction of credit resources and the
tightening of the terms of lending, the rise in in-
terest rates and the change in investor preferences
in favour of high-security assets, brought about
the outflow of capital by the private sector and
the expansion of Russian banking sector opera-
tions with the foreign sector. According to balance
of payments data, banking sector foreign assets
increased by $18.4 billion in the third quarter of
2007 Q3
this year (in the third quarter of 2006 they grew
by $3.0 billion) and foreign liabilities by $19.1 bil-
lion (as against $11.8 billion in the third quarter of
2006). As a result, both the size and structure of
the monetary base had changed significantly and
the raising of the reserve requirements on July 1
and significant growth in the monetary authori-
ties’ claims on credit institutions in August (96.5
billion rubles) contributed to this change. As a con-
sequence, the broad monetary base contracted
by 10.7% in the third quarter of this year (in the
same period last year it expanded by 6.1%). The
share of banking sector funds sterilised by the
Bank of Russia by taking bank funds on deposit
and conducting operations with Bank of Russia
bonds (OBR) in the third quarter contracted from
21.6% to 4.8% of total broad money. The share
of banking sector required reserves expanded
from 4.8% to 6.9%. The share of credit institu-
tions’ funds in correspondent accounts with the
Bank of Russia expanded from 10.3% to 12.6% in
the third quarter and the share of cash in circula-
tion, taking into account the cash balances in credit
institutions’ cash departments, increased from
63.3% to 75.6%.
Net foreign assets of the monetary au-
thorities, which increased by 159.6 billion rubles,
and the monetary authorities’ claims on credit
institutions, which increased by 55.4 billion rubles
in absolute terms, were the principal source of
growth in the broad monetary base in the third
quarter of this year. The continued accumulation
of funds in general government accounts, which
was primarily due to the expansion of the
Stabilisation Fund, was a major brake on money
supply growth in the third quarter of the year. In
the first nine months of 2007, the Stabilisation
Fund grew by 49.9% to 3,519.1 billion rubles (in
the same period last year it increased by 53.1%).
Net credit to the government contracted by 670.0
billion rubles in the third quarter of this year.
The money multiplier (M2 to broad
money) increased by 18.6% in the third quarter
of this year and as of October 1, 2007, it stood at
2.5, the highest level in several years.
The correlation between the consumer price
dynamics and M2 in January-September caused
the ruble supply to grow by 18.7% in real terms
(19.6% in the same period last year). The slowing
of M2 growth in real terms has been accompa-
nied by the improvement of the M2 structure. In
the first nine months of this year, the share of cash
in M2 contracted by 2.9 percentage points to
28.0% as of October 1, 2007, whereas the share
of time deposits expanded by half a percentage
point to 38.3% as of the same date.
The slowing of real growth in the money
supply and the acceleration of the reduction of the
velocity of money in January-September 2007, as
compared with the same period of 2006, and the
continued improvement of the M2 structure miti-
gate the inflationary consequences of growth in
the money supply.
232007 Q3
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
* 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 Q3
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 8.6 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
* Excluding vegetables and fruit.
** Since March 2005 - Bank of Russia estimate.
252007 Q3
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 7.5 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
* Excluding vegetables and fruit.
** Since March 2005 - Bank of Russia estimate.
2007 Q3
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
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in the calculation of the core consumer price index.
272007 Q3
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
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in the calculation of the core consumer price index.
2007 Q3
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 37.7 3.2 67.3 32.7
December 36.6 22.6 36.3 4.6 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 17.5 13.8 42.7 26.0 40.4 59.6
July 22.8 14.1 39.2 23.9 45.8 54.2
August 31.6 17.0 40.8 10.6 58.5 41.5
September 39.2 18.9 37.8 4.1 69.9 30.1
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in the calculation of the core consumer price index.
292007 Q3
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 35.6 29.6 17.8 17.0 74.1 25.9
December 39.5 18.9 23.2 18.4 64.4 35.6
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 15.6 11.6 16.6 56.2 35.1 64.9
July 55.9 15.7 17.5 10.9 79.2 20.8
August 724.2 251.3 162.1 -1,037.6 1,016.5 -916.5
September 99.5 33.9 14.5 -47.8 160.7 -60.7
* Excluding vegetables and fruit.
** Growth in prices of goods and paid services not included in the calculation of the core consumer price index.
2007 Q3
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 21,620
2006 5,662 11,988 19,236 26,781
2007 6,566 14,213
over period since start of year, as % of corresponding period of
previous year
2005 105.0 105.3 105.8 106.4
2006 105.0 106.1 106.3 106.7
2007 107.9 107.9
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
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
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
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 102.9 103.7 101.5
over period since start of year, as % of corresponding period
of previous year
2005 100.3 100.9 102.7 102.4
2006 101.3 101.9 101.6 103.6
2007 102.9 103.4 102.2
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
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
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 1,852.4 3,915.5 6,147.6 8,690.3
2007 2,234.9 4,751.3 7,511.0
as % of corresponding quarter of previous year
2005 110.5 113.8 113.3 113.5
2006 111.1 113.3 115.0 115.0
2007 113.9 114.8 115.4
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 5,087.5
as % of GDP
2005 26.7 24.7 23.7 23.7
2006 24.7 24.5 23.7 23.4
2007 21.7 22.9 22.2*
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
as % of GDP
2005 15.0 15.0 16.2 16.2
2006 14.5 15.5 14.9 16.0
2007 14.4 15.3 15.1*
Federal budget surplus on accrual basis, as of end of period
billion rubles
2005 525.3 942.2 1,162.0 1,612.9
2006 575.9 1,083.4 1,694.5 1,994.1
2007 476.3 1,076.0 1,623.2
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*
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.
312007 Q3
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 13,534
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 127.3 125.9 124.2
over period since start of year , as % of corresponding period
of previous year
2005 122.6 122.4 123.0 126.9
2006 122.3 123.7 124.1 124.3
2007 127.3 126.6 125.7
Real imputed average monthly
per employee wage as % of corresponding quarter of previous year
2005 108.4 107.6 110.0 113.4
2006 110.3 114.3 114.3 114.8
2007 118.2 116.6 114.1
Household money income per capita monthly average, rubles
2005 6,539.5 7,707.3 8,064.7 9,697.7
2006 8,025.7 9,806.4 10,087.6 11,791.8
2007 9,752.4 11,806.9 12,411.4
Household real disposable
money income
as % of corresponding quarter of previous year
2005 105.1 114.1 112.7 111.9
2006 106.8 113.2 111.4 109.3
2007 112.8 110.6 113.7
over period since start of year, as % of corresponding period
of previous year
2005 105.1 109.8 110.8 111.1
2006 106.8 110.2 110.6 110.2
2007 112.8 111.6 112.4
Household spending,
as % of income
purchase of goods and payment of services
2005 73.6 70.1 71.9 67.2
2006 73.9 67.9 71.4 68.2
2007 74.7 69.8 72.3
compulsory payments and contributions
2005 8.4 8.8 9.6 9.6
2006 11.4 11.0 11.6 11.1
2007 13.1 12.5 11.6
growth in savings
2005 13.1 10.3 9.5 9.4
2006 10.7 9.7 7.3 10.3
2007 9.0 7.9 5.4
foreign exchange purchase
2005 7.6 8.0 9.1 9.2
2006 7.6 7.0 7.3 7.4
2007 5.3 7.1 5.3
cash on hand
2005 -2.7 2.8 -0.1 4.6
2006 -3.6 4.4 2.4 3.0
2007 -2.1 4.5 5.4
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
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
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
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 4.4
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 5.8
2007 Q3
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
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
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 72.1 156.3 247.0
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 107.9 108.7 110.4
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
as % of corresponding period of previous year
2005 129.1 128.6 129.1 128.8
2006 120.6 126.6 128.5 131.3
2007 139.0 136.8 136.3
Current account (over period since start of year), $ billion
2005 20.1 42.4 62.5 84.4
2006 30.7 55.5 79.7 96.1
2007 22.9 39.0 57.1
Net capital outflow (inflow) by private sector (over period since start of year), $ billion
2005 1.7 -3.6 4.5 0.1
2006 -6.0 14.2 26.3 40.1
2007 13.5 66.2 56.7
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
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
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
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
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
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
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
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
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
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 8.6
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
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 4.0
332007 Q3
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 1.16 2.96 2.31 4.56
2006 3.17 2.78 2.58 5.14
2007 3.90 3.40 4.91
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
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
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
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
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
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
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
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
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
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
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
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
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
Refinance rate, % p.a.
2005 13.0 13.0 13.0 12.0
2006 12.0 11.5 11.5 11.0
2007 10.5 10.0 10.0
2007 Q3
Table 8 (end)
Year 1.01 1.04 1.07 1.10
Monetary indicators
M0, billion rubles
2005 1,534.8 1,481.7 1,650.7 1,740.7
2006 2,009.2 1,928.8 2,233.4 2,400.8
2007 2,785.2 2,741.2 3,027.5 3,220.9
M2, billion rubles
2005 4,363.3 4,474.6 4,927.4 5,292.8
2006 6,045.6 6,169.4 7,092.3 7,757.5
2007 8,995.8 9,412.6 10,857.7 11,494.0
Net foreign assets of monetary authorities and credit institutions, billion rubles
2005 3,210.0 3,753.3 4,379.7 4,405.4
2006 4,867.9 5,433.6 6,221.1 6,281.9
2007 6,927.5 7,988.6 8,815.9 9,091.1
Domestic claims, billion rubles
2005 4,345.6 3,509.6 3,487.7 4,035.2
2006 4,460.8 4,129.4 4,256.1 4,944.1
2007 5,727.7 5,696.9 6,241.6 6,670.5
Money (monetary survey definition), billion rubles
2005 2,848.3 2,859.6 3,144.3 3,371.9
2006 3,858.5 3,855.9 4,479.3 4,856.1
2007 5,598.4 5,774.3 6,676.5 7,088.4
Quasi-money (monetary survey definition), billion rubles
2005 2,450.4 2,640.0 2,871.6 3,086.5
2006 3,362.6 3,537.0 3,825.5 4,041.1
2007 4,548.3 5,120.2 5,352.7 5,605.4
Foreign currency deposits, billion rubles
2005 935.1 1,024.9 1,090.6 1,167.9
2006 1,178.2 1,225.9 1,221.0 1,153.2
2007 1,155.4 1,490.6 1,183.7 1,212.4
Broad monetary base, billion rubles
2005 2,380.3 2,250.4 2,303.3 2,539.7
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
Balances in correspondent accounts, billion rubles
2005 480.4 320.9 276.7 374.4
2006 508.6 320.0 430.9 443.7
2007 638.1 518.1 528.7 576.3
M2 velocity
annual average
2005 4.7 4.7 4.6 4.6
2006 4.4 4.3 4.1 4.0
2007 3.8 3.6 3.3 3.2
change since start of year, %
2005 -10.0***** -1.1 -1.9 -3.4
2006 -6.5***** -2.3 -6.1 -9.6
2007 -13.5***** -6.1 -12.4 -17.0
Monetisation of the economy (by M2 aggregate), %
2005 21.2 21.4 21.6 22.0
2006 22.7 23.2 24.2 25.1
2007 26.2 27.9 29.9 31.6
Money multiplier
by broad monetary base
2005 1.83 1.99 2.14 2.09
2006 2.08 2.27 2.16 2.23
2007 2.18 2.24 2.11 2.51
change since start of year, %
2005 9.2***** 8.5 16.7 13.7
2006 13.2***** 9.3 4.0 7.3
2007 5.2***** 2.5 -3.2 14.8
Foreign exchange rates
rubles per UD dollar
2005 27.75 27.85 28.63 28.53
2006 28.78 27.70 26.94 26.78
2007 26.33 26.01 25.82 24.95
rubles per euro
2005 37.84 36.03 34.63 34.31
2006 34.19 33.63 34.24 33.98
2007 34.69 34.69 34.72 35.35
* 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, 2007
Research and Information Department