March Inflation Accelerates To 1.6%

Concorde Capital: We were curious if March would continue its 2003 inflation rate pattern. At that time, monthly inflation fell during the first 8 months, ending with annual rate of 8%. However, this year March inflation accelerated significantly, breaking the trend. March inflation was driven mainly by prices for food products, which rose 2.2%, while non-food products and services demonstrated slower growth rates of 0.2% and 0.5%, respectively. The Economic Ministry forecast that inflation would reach 1.0% in March and 3.7% by the end of 1Q. The government plans to contain inflation this year below the 10%-level, at 9.8%. We are less optimistic and still maintain our annual inflation forecast at 11%.