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MOSCOW, Oct 12 (Businesshala) – Russia has raised its 2021 inflation forecast to 7.4% from 5.8%, the economy minister said on Tuesday, pressuring the central bank to raise interest rates for the sixth time this year by its- Meeting set up next week.
Inflation, which surpassed the central bank’s 4% target at the end of 2020, is at its peak but is not expected to fall, Economy Minister Maxim Reshetnikov said, with food inflation being the main contributor to rising prices.
Annual inflation in Russia reached around 7.5% in early October, the highest since June 2016, already eating into earnings from the COVID-19 crisis and a weakening ruble.
Central bank deputy governor Alexey Zabotkin said the bank would raise rates as much as it needed to bring inflation to its 4% target, indicating a hike at its October 22 meeting.
“We believe inflation is at its peak, but we do not expect any significant decline due to crop conditions,” Reshetnikov said on Tuesday.
As of 6 October, Russia had harvested only 108.4 million tonnes of grain, compared to 125.2 million in the same phase in 2020.
Reshetnikov said that there are no talks with retailers to impose new export duties or curb upper price limits.
Reshetnikov said the economy ministry is keeping its 2022 inflation target at 4%. (Reporting by Daria Korsunskaya and Katya Golubkova Writing by Gabriele Tetroult-Farber / Alexander Marrow; Editing by Mark Trevelyan)