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Economic Development Ministry's Inflation Forecast Overestimated - Finance Ministry

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The Russian Finance Ministry believes that the Economic Development Ministry’s inflation estimate for 2016-2017 is too high, Deputy Finance Minister Alexei Moiseyev said Wednesday.

MOSCOW, August 27 (RIA Novosti) - MOSCOW, August 27 (RIA Novosti) – The Russian Finance Ministry believes that the Economic Development Ministry’s inflation estimate for 2016-2017 is too high, Deputy Finance Minister Alexei Moiseyev said Wednesday.

“It seems to us that the inflation rate [forecast by the Economic Development Ministry] is a little high, it seems that the inflation rate for 2016-2017 is bloated,” Moiseyev said.

Moiseyev added that according to the Finance Ministry’s calculations, the Economic Development Ministry’s inflation rate is 50 basis points too high.

The Economic Development Ministry estimated inflation in Russia at 4.6 percent for 2016 and 4.3 percent for 2017.

On Tuesday, the Russian Ministry of Economic Development’s Macroeconomic Forecasting Department director, Oleg Zasov, said the ministry’s forecasts for inflation in 2016 and 2017 are unchanged.

However, Zasov said the country’s inflation rate for 2015 was recalculated due to the Western sanctions introduced against Russia amid the Ukrainian crisis.

“We increased the prognosis on inflation for next year to 6.5 percent for the base scenario," Zasov said.

“[Western] sanctions against Russia and our country’s countermeasures played a defining role in this," the director said.

Zasov pointed out two key factors affecting inflation: price growth associated with sanctions and the introduction of a sales tax at the beginning of 2015.

On Tuesday, Russian Economic Development Minister Alexei Ulyukayev commented on the predicted inflation rates for 2014, saying that the ministry has increased its inflation forecast for this year to 7.2 percent from the original 6 percent.

“We’ll put the range at 7-7.5 percent, and to be more exact, then at 7.2 percent,” Ulyukayev said.

Over the past months, the United States and the European Union introduced several rounds of targeted sanctions against the Russian economy, unjustifiably blaming Moscow for meddling in Ukraine’s internal affairs.

As the Ukrainian crisis escalated, the United States persuaded its allies to add Russian individuals and entities to their own blacklists.

Moscow has repeatedly called the language of sanctions counterproductive and stated that Russia is not party to Ukraine’s domestic conflict.

In August, Russia introduced protective measures banning the import of agricultural and food products from countries that had imposed sanctions on Russia for a year.

Tags:
inflation, economy, Russian Ministry of Economic Development, Russian Finance Ministry, Alexei Ulyukayev, Alexei Moiseyev
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