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. Last Updated: 07/27/2016

Bank Sees Lower '09 Inflation

Russian inflation will probably slow to below 10 percent next year, in line with a call by Prime Minister Vladimir Putin, UralSib said Tuesday.

"The risk of a new inflationary spiral in Russia is very low," chief economist Vladimir Tikhomirov wrote in a research note. "On the contrary, our view is that inflation already peaked in mid-2008."

Correcting commodities prices, a stronger state role in controlling prices and tighter liquidity both inside and outside Russia will push the inflation rate down to 9.4 percent in 2009, he said. Inflation will slow from 14.7 percent in July to from 12 to 12.6 percent by the end of 2008, he said.

Inflation at its current rate is "unacceptable" and the government needs to push it below 10 percent next year, Putin said Aug. 21. The Economic Development Ministry boosted its 2008 forecast for annual inflation to 11.8 percent last month, compared with a previous estimate of 10.5 percent.

"We are likely to see far more modest rates of income growth, both in the private and public spheres," Tikhomirov said. "Coupled with the higher cost of credit, this could negatively affect future levels of growth in trade, services, finances and real estate."

The Economic Development Ministry has a "working forecast" for inflation of 12.2 percent to 12.4 percent this year, Interfax reported Tuesday, citing an unidentified government official.