Inflation Hits 15.1% In May

Inflation accelerated to the fastest pace in more than five years, hitting a rate of 15.1 percent in May amid soaring food prices.

Consumer prices rose by an annualized 15.1 percent, from 14.3 percent last month, the State Statistics Service said Thursday. That exceeded the 15 percent median estimate of 15 economists surveyed by Bloomberg. On the month, prices gained 1.4 percent, the same as in April. Food prices rose an annual 22.1 percent.

The government has failed to bring inflation closer to its target of 10.5 percent this year, which a top Central Bank official called "politicized" on Thursday.

"Though the Central Bank hates discussing the idea that the ruble could strengthen, closer to autumn it may have to take this measure," said Yulia Tseplyayeva, chief economist at Merrill Lynch in Moscow. "If it doesn't ... the inflation rate could stay high at 14 percent to 14.5 percent."

Central Bank deputy chairman Konstantin Korishchenko told the State Duma that the 10.5 percent inflation forecast was "politicized," but that the bank was unlikely to change it. He said increased volatility among factors that influence inflation had caused the quality of forecasts to deteriorate.

"Our forecasting is based on statistical models. When sharp fluctuations ... are taking place, the forecasts' quality is going down," he said. "The quality of any forecast in such an environment will be low."