Report: Double-digit inflation to stay in Russia through 2015

MOSCOW, Dec 29 (PRIME) -- Double-digit inflation will persist in Russia through the whole of 2015, Economic Development Minister Alexei Ulyukayev said in an interview to Rossiya 24 TV channel on late December 26.

“Double-digit inflation will hold through the whole 2015 with a higher level at the end of the first quarter and at the beginning of the second quarter…We forecast annual inflation of 10% in December 2015,” Ulyukayev said, adding that 10-11% inflation does not equal the 17% central bank’s key rate, so there is a significant reserve to normalize rates.

Russia’s economy will adapt to the new conditions within a year or a year and a half, and recovery will start from 2016, he said, pointing out that the adaptation abilities of the economy are rather high even if the sanctions and low oil prices stay in place.

“These two assumptions (low oil prices and sanctions) lead us to an about 3% decrease,” Ulyukayev said.

The Economic Development Ministry has also developed a moderate development scenario under an oil price of U.S. $40 per barrel, he said.

He said that after a plunge of the ruble in the week between December 15 and December 21, the currency has rebounded to a balanced, fundamentally based rate.

Ulyukayev also said that it would be unreasonable to freeze prices due to the high inflation rates, as it may lead to a deficit.

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