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. Last Updated: 07/27/2016

Inflation High Point In Report

Russian inflation slid to new year-on-year lows in September, but wage arrears rose steeply, and industrial production shrank in an economy struggling to rake in taxes and pay workers on time.


The State Statistics Committee said consumer prices rose just 31.7 percent in the year to September, the lowest level since economic reforms got under way in January 1992.


But September industrial production was 6.8 percent lower than a year earlier, dashing hopes that a prolonged economic slump was about to come to an end.


Gross domestic product for the first nine months of this year shrank 6.6 percent from the same period in 1995. Industrial production was down 5.5 percent for the period.


Wage arrears rose 10 percent in September alone, hitting a total of more than 40 trillion rubles ($9 billion). Arrears amounted to 36 trillion rubles in August.


Wage and tax arrears are two of the biggest problems facing the Russian economy. Officials announced new plans to tackle the tax problem Tuesday, threatening to sue six firms for bankruptcy unless they paid their tax bills within a week.


President Boris Yeltsin last week announced the creation of an emergency commission to work out how to resolve the tax problem and bring in extra cash.


But many economists have cast doubt on the government's ability to enforce plans to raise extra cash.


The International Monetary Fund, which has blessed Russian economic reforms with a $10 billion, three-year loan, is watching tax collection carefully as a pointer to Russia's ability to meet its budget targets.


A team of IMF experts arrives in Moscow on Wednesday to assess the latest figures. The fund delayed paying one disbursement of the loan during the summer because it was worried about tax revenues.