Russia May Institute Price Controls on Basic Food Items.Docx Uploaded Successfully

Topics: Vladimir Putin, Dmitry Medvedev, Austrian School Pages: 2 (559 words) Published: December 1, 2012
Russia may institute price controls on basic food items, Deputy Industry and Trade MinisterStanislav Naumov said. The worst drought in at least 50 years has slashed harvests across Russia, fueling inflation. August consumer prices rose 0.6 percent from the previous month, the most in a decade. VTB Capital yesterday revised its 2010 inflation forecast to 8 percent from 7.6 percent. “Sharp price growth, low development of retail chains”means the government needs to curb prices in some regions, Naumov told reporters today in Moscow. “It’s necessary to institute a maximum retail price for those products that are in short supply.” Russia will lose about 30 million metric tons of grain as a result of the drought, though the country has enough grain for domestic needs, Prime Minister Vladimir Putin told a conference in Nizhny Novgorod today. “Not allowing speculation on the food market” is a priority for the government, he said in televised comments. Bank Rossii kept its main interest rates unchanged last month as policy makers, including Finance Minister Alexei Kudrin, said inflationary pressures triggered by the drought couldn’t be stemmed by monetary policy. Consumer price-growth may accelerate to 0.8 percent in September, RIA Novosti cited Deputy Economy Minister Andrei Klepach as saying yesterday. “A pick-up in inflation would add support to our view that interest rates should begin to rise as early as October-November,” Natalia Orlova and Dmitry Dolgin, analysts at Alfa Bank in Moscow, said today in an e-mailed note. Inflation is set to reach between 7 percent and 8 percent at the end of the year, according to government estimates. Citigroup Inc. forecast consumer price growth will reach an annual 9.2 percent. The government may set price curbs for 24 staple food items, Naumov said, without specifying what they would be. President Dmitry Medvedev’s top economic adviser said he opposes imposing maximum prices. From the article in this news, The price of...
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