Russians brace for higher inflation
SINCE the exit last month of tough anti-inflation reformers Vice Premier Yegor Gaidar and Finance Minister Boris Fyodorov, Russians are anticipating a new wave of inflation. In fact, both consumers and government officials already confirm that the slight downward trend in inflation witnessed in November and December has already evaporated. Monthly rates of 12 percent are now back up to the 20-percent-plus level.Skip to next paragraph
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Vadim, a driver in Moscow, uses his own index - milk. In November, a liter of milk could be had for 300 rubles ($.19). Now it fetches 700 rubles ($.45). Prices of basic items in a typical family basket, such as milk, eggs, and yogurt, go up at least weekly, if not faster, he reports.
The government's official inflation targets already reflect the losing battle. On Jan. 20, Prime Minister Viktor Chernomyrdin predicted inflation of 15 to 18 percent in the first half of this year and only 8 to 9 percent by year-end. But little more than a week later, at the World Economic Forum in Davos, Switzerland, the Russian premier told the conference that inflation would be held to only 20 percent in the first half of the year and down to between 15 to 18 percent by the end of the year.
On Feb. 8, the newly named Minister of Economy Alexander Shokhin told a conference in Moscow that the government was determined to cut inflation to 7 to 9 percent by year-end.