Deflation Reaches 0.3% In March.

Consumer prices fell by 0.3% in March, resulting in a 2.7% 1Q06 CPI rate. Concorde Capital: The last time consumer prices in fell in March was 2002, when the annual CPI reached -0.6%. However there is no chance of that happening this year. The CPI rate is expected to accelerate latter in the year due to a moderate agriculture harvest and increased gas prices. The latter will be partially passed on to consumers through higher gas and electricity tariffs. The 2006 budget projects CPI of 8.7%. In March the Economic Ministry worsened its CPI forecast to 10-10.1% as optimistic forecast and 11.4-11.6% as worst-case scenario. We maintain our annual CPI rate estimate at 10%.