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Russian November Inflation Probably Quickened After Slowdown

Russian inflation probably quickened in November after slowing unexpectedly the previous month.

Consumer prices advanced 6.6 percent from a year earlier, compared with 6.5 percent in October, according to the median estimate of 21 economists surveyed by Bloomberg. Prices rose 0.5 percent in the month, matching the increase in October, a second poll of 18 economists showed. The Moscow-based Federal Statistics Service will report the data today or tomorrow.

Russia, the biggest emerging economy to raise interest rates this year, is struggling to restrain price growth after droughts in the U.S. and locally drove up food costs. Policy makers want to cap inflation at 6.5 percent to 7 percent this year, according to central bank Chairman Sergei Ignatiev, and are targeting a 5 percent-6 percent rate in 2013.

“We expect the upward trend to continue in the coming months,” Barclays Plc economists said in an e-mailed research note today. “Weekly readings show inflation returning to 6.6 percent.”

The ruble is the third-best performer over the last three months among more than 20 emerging-market currencies tracked by Bloomberg, gaining 4.7 percent against the dollar. It was little changed at 30.8367 per dollar at 11:15 a.m. in Moscow.

While food costs have eased in recent weeks, bank lending has supported sales of non-food products, Oleg Zasov, head of the Economy Ministry’s macroeconomic forecasting department, told reporters Nov. 22. The weekly inflation rate has been at 0.1 percent every week this month after consumer prices were unchanged in the seven days to Oct. 29.

GDP Slowdown

Russia’s economy expanded 2.3 percent from a year earlier in October, decelerating for a fifth month and recording the slowest growth since a recovery began at the start of 2010.

The pace of retail-sales growth unexpectedly declined to 3.8 percent in October after unemployment increased for the first time since January and slower-than-estimated gains in wages and incomes curbed consumer purchasing power.

After raising interest rates by a quarter-point in September to tackle inflation, Bank Rossii left borrowing costs unchanged at 8.25 percent in October and November. The central bank, which is scheduled to discuss monetary policy on Dec. 10, will probably hold rates flat for a third month, according to Vladimir Tikhomirov, chief economist at Otkritie Financial Corp.

“I don’t expect a rate increase,” Tikhomirov said by phone. “If the central bank increases interest rates, there will be a serious hit to economic growth.”

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