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. Last Updated: 07/27/2016

Inflation Quickens in January

Russian prices have already risen by more this year than they did in all of January 2004, Economic Development and Trade Minister German Gref said Thursday, saying the spike in inflation made quick action on economic reforms vital.

Gref said prices grew by 1.9 percent in the first 17 days of January -- compared to a monthly rate of 1.8 in all of January last year.

That works out at annualized inflation of 50 percent.

January is traditionally Russia's most inflationary month as monopoly tariff hikes come into force. The cost of a ticket on the Moscow metro, for example, went up by 40 percent on Jan. 1.

But price growth should slow going forward, and Gref said he still thought it would be possible to meet this year's budgeted annual inflation goal of 8.5 percent.

Gref said around two-thirds of the New Year price hikes had come in services, pointing to hikes in utility and public transportation costs.

The government has ordered cartel and price watchdogs to monitor regulated tariffs, checking for rises above permitted levels, and Gref said reforms to housing services were vital to bringing prices under control.

Analysts doubt the government can get a grip on inflation quickly after the introduction of cash benefits to replace benefits in kind, such as free medicine and bus passes for the old, pumped fresh cash into the economy.

Facing widespread protests by the elderly, the government has agreed to hike pensions by more than planned in a package of measures that will cost another 105 billion rubles ($3.7 billion) this year.