Consumer Prices Rise 0.1%

Consumer prices rose 0.1 percent in the week to Monday, the same pace as in the previous period, the State Statistics Service said Wednesday, with inflation for the year to date reaching 9.8 percent.

Following the release of the weekly data, Interfax reported that the Economic Development Ministry expected inflation of 0.4 to 0.6 percent in September.

This appeared to be an upward revision, as only a day earlier Economic Development Minister Elvira Nabiullina was quoted as saying that September inflation would be no higher than August's 0.4 percent.

Officials had hoped that a good harvest would tame inflation in August and September, helping to reduce the figure for 2008 as a whole. Fruit and vegetable prices have fallen and were down 2.8 percent in the latest week alone.

The Central Bank has raised interest rates and banks' reserve requirements, as well as allowing the ruble to appreciate in its battle with inflation this year.

The last and arguably most powerful of these tools now seems to be out of action, as the flight of foreign capital from Russia over the past month has sent the ruble plummeting, putting any currency appreciation out of the question for now.

As a result, some analysts say official inflation targets are looking even further out of reach. The Central Bank has forecast that inflation will be around 11 percent in 2008, while the Economic Development Ministry has said 11.8 percent. Analysts are forecasting 13 percent.