Moscow Mayor Yuri Luzhkov visits a butchery.
Photo: Ilya Pitalev
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Prices to Be Beyond Control Next Year
The prices will climb more than 10 percent in 2008, analysts of Interfax.ru forecast, explaining that the time-delay bomb has been put this year and the surge in fuel prices and freezing prices for certain food products are the explosives. Wholesalers changed the price tags in November, signaling the price increase will reach stores early in the year.
Even in the government, they don’t count on some slowdown in prices early in 2008. Deputy Prime Minister, Finance Minister Alexei Kudrin forecasted some improvement in the middle of next year. The inflation could be contained only by the year-end with the prices going up just 8.5 percent vs. 12 percent this year.
The analysts agree that the surge in prices is inevitable at the beginning of 2008, but they don’t share the government’s optimism in part of the annual inflation. The most moderate forecasts set forth the price growth of 9 percent to 10 percent, while the real increase is likely to exceed these figures.
In the government, they blame abnormal inflation on huge money inflow and on global increase in food prices. The analysts, however, add a few more reasons to the list, giving the catastrophic growth of fuel prices as the basic cause. Taking advantage of skyrocketing prices, oil companies are exporting crude oil instead of selling it in the country, creating at the same time the fuel shortage in Russia.
Besides, the agreement on freezing prices for basic food that the biggest market players had to conclude with the government on the threshold of parliamentary elections expires February 1. The growth will be skyrocketing once the companies rewrite their price lists late January.
www.kommersant.com
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