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Russia expects prices to fall in August

MOSCOW - Russian consumer prices rose 0.1 percent during the first 14 days of August and will fall for the rest of the month and for the month as a whole, the Economy Ministry said on Wednesday.

A fall in prices in August would represent a sharp slowdown from July when rising food prices boosted prices by 0.7 percent and from the three previous months when inflation was between 0.3 to 0.5 percent.

Russia’s consumer price index falls or stagnates almost every August, partly because it is the start of the harvest season, reducing the price of fruit and vegetables.

“For the period of 1-14 August prices rose by 0.1 percent,” the Economy Ministry said in a statement. “The average price for the month will not rise and may even fall by 0.1 percent.”

Inflation slowed to 6.9 percent in January-July this year from 8.5 percent during the same period of 2005.

But economic growth in the world’s second largest oil exporter continues to accelerate, the Economy Ministry said in its monthly bulletin report.

Gross domestic product (GDP) grew 6.5 percent in the first seven months of the year compared to 5.6 percent a year ago.

Growth was 7.4 percent year-on-year in July. The government has predicted growth of 6.6 percent for the year.