CPI Hits 2.7% in February, PPI up 3.0%

According to the State Statistics Committee, CPI was 2.7% in February. The main contributor to inflation was growth in food products (+3.9% mom), which was reinforced by acceleration in producer prices (+3.0% mom), especially in steel (5.9%), mining (4.5%) and food (3.4%). Polina Khomenko: The demand-driven boom in food prices that began last August is unlikely to be easily slowed by toughening monetary policy, some effect may review in the second quarter of 2008. We believe inflation will exceed the government’s forecast of 9.6% yoy in 2008 and stick to our estimate of cumulative 15% CPI by yearend.