Rosstat warns

The January increase in prices destroys the government’s plans with the main sensation of yesterday’s press conference of the head of Rosstat Vladimir Sokolin was the forecast of a record high level of January inflation. According to the main statistics, in January 2006, consumer prices will be no lower than in January last year, that is, about 2.6% per month. There has been no such sharp monthly take -off of prices in Russia for a year, and many in the government hoped that the January price jumps remained in the past. However, the hopes for the pacification of January inflation were in vain. And this is a sign of a possible collapse of hopes for holding prices in 2006 within 7-8.5%, that is, within the framework of planned inflation, recorded in the law on the budget of planned inflation.

The head of Rosstat himself yesterday refused to evaluate the chances of fulfilling the “Inflation Plan” in 2006. But most of the experts surveyed by the newspaper consider the retention of prices in the range of 7-8.5% at the end of the year unlikely. Thus, the expert of the Center for Macroeconomic Analysis and Short-term forecasting (TsMAKP) Dmitry Belousov said that more real prices in the coming year are at 9.5-10%. Belousov evaluates the January inflation "at 2.6% plus or minus one tenth," and it is precisely such an increase in prices, according to the expert, that makes official budget forecasts unrealistic. Nevertheless, the government retains a chance to solve the political problem - to achieve unambiguous, not double -digit inflation.

The January jump in prices puzzled government officials. According to the source in the White House apparatus, the government did everything to prevent the relapse of last year’s price growth, and therefore is looking for the reasons for high January inflation in the field of responsibility of the Central Bank, which could allow increasing the money supply. An indirect sign of the monetary nature of January inflation may be the growth of currency reserves of the Central Bank in the last days of last year. “The January inflation is traditionally explained by an increase in utilities, but the increase in prices in housing and communal services this year is much less than in the past, and it is still difficult for us to explain the exact repetition of last year’s price growth scenario,” the official told Gazeta. Recall that the government limited 24% of the increase in housing and communal services in 2006.

Despite the confusion of state husbands, independent economists do not see anything unusual in high January inflation. Thus, Natalya Schveva, head of the Analytical Research Department of the Institute of Complex Strategic Research (ICSI), considers the main causes of inflation of fruit and vegetables and all the same growth in utility tariffs. And Dmitry Belousov is sure that inflation could be higher, "if the Ministry of Finance allowed the same powerful reset from the budget accounts that took place in past years."

However, it will be possible to find the main culprit in the inflation fiasco only after the appearance of official statistics of prices for all types of goods and services. And this will happen only in February.

The government’s special attention to the level of inflation is explained not only by the errors of budget forecasts, but also by the features of the management of the stabilization fund. In conditions of high inflation, the accumulation of fund funds in the treasury accounts leads to their significant depreciation. According to ICSI calculations, the total losses from the depreciation of the stab fund funds due to inflation from February 2004 amounted to 99.6 billion rubles, that is, 8% of the total fund. And in 2005, due to high inflation, the fund lost about 75 billion rubles. With an increase in the stab fund, budget losses will increase. In an interview with Gazeta, the deputy head of the government apparatus, Mikhail Kopeikin, estimated the budget losses from non -use of a stab fund at 600 billion rubles (see the newspaper of January 16, 2006).

Another headache of the government will be a search for the reasons for a decrease in the rate of economic growth and especially a slowdown in industry growth. According to the head of the Federal State Statistics Service yesterday, industrial production in 2005 increases by only 4%. Meanwhile, in 2003-2004, an increase of 7%was recorded in industry. According to Vladimir Sokolin, the growth rate of industrial production decreased due to the situation in TEK. "It is absolutely clear that the main slowdown occurred in the fuel and energy industries, namely in oil and gas production," Sokolin said yesterday. However, economists see other problems of domestic industry. Thus, the leading expert of the Central Department Store, Vladimir Salnikov, indicates a decrease in internal production due to aggravating competition with increasing imports.

The numbers of the official growth rate of the economy over the past year are not fully specified. “The growth rate of GDP in 2005 will most likely be about 6%, maybe a little more or a little less,” the head of Rosstat said yesterday. It is possible that the final assessments of the growth of the economy that will appear closer to March may even be lower than the level of 6.4%declared by the Ministry of Economic Development.

01/24/2006 / Mikhail Sergeyev, the material was published in the "newspaper" No. 10 dated 01.25.2006.