Russian inflation soars to 12%, up 3%

Russia’s Economic Development Ministry says inflation this year will be 12%. Initially, the government forecast inflation at 7-8%, and then revised its estimate upwards in October. Inflation to date this year reached 11.1%. Last year's full-year inflation

Economists, including the World Bank, have said that the only way for Russia to tackle high inflation in the future will be to appreciate the rouble but the Aleksandr Morozov, Chief Economist at HSBC in Moscow says that would only create other pressures.

“It's very unlikely we will see any further rouble appreciation. The key reason is that current account surplus keeps falling and it does not make much sense to appreciate the rouble because everybody would know that in very short time the Central Bank will have to do the opposite – to weaken the rouble because pressures will be on the other side. There will be more demand for hard currency,” predicts he.