As Russia emerges from the economic crisis it now faces more traditional foes, with higher food prices, and capital inflows creating speculative bubbles
The worst of the crunch may be over, but as the consumer’s basket will tell you, Russia’s economic health faces a further relapse.
In 2010, inflation was 8.8pc, after being in double digits for more than two decades. But the price of the monthly basket of goods used to define the poverty level rose 22pc, to 2,626 rubles (£55).
“The reappearance of inflation could derail Russia’s economic recovery as it hits the Russian consumer’s pocket directly. With oil prices expected to be more or less flat in 2011, it will be the strength of internal consumption that will set the pace for economic growth this year,” said Alexey Moiseev, chief economist at VTB Capital.
“The rise in food prices is the major concern and part of the current global upward trend, but there is relatively little the authorities can do about it.”
Sourced from Telegraph
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