CPI Slows To 0.2% In March

According to the State Statistics Committee CPI grew 0.2% mom in February. 3M07 CPI growth came to 1.3% ytd, a five-year low. In February CPI grew at 0.6% mom. Alexander Viktorov: This year’s extremely low inflation figures came as a surprise to even the government. These lower numbers are due to the drop in communal services payments and the lack of a major seasonal hike in food prices. In addition, the State Statistics Committee, reformulated its method for calculating CPI in 2007 by increasing the share of non-food products in its basket of goods and services. Non-food products have been more of a deflationary force over the last few years. We see 2007 inflation at 11% a bit lower than 2006’s figure – 11.6%.