OREANDA-NEWS. August 17, 2012. The annual core inflation made up 4%, 0.3 p.p down as compared with the previous month. The monthly inflation increased 0.1% in July, which was explained by 0.3% higher prices for foodstuff, 0.1% higher prices for nonfoods whereas tariffs for services for population did not change. Since October, 2011 the core inflation growth rates have slowed down, NBM say.

This is explained by a moderate growth of external and domestic demands caused by a slower increase in incomes of the population and by ambiguity created by the sovereign debt crisis in the area of Euro. The monthly core inflation made up 0.2% in July, 2012 0.1 p.p. up as compared with the previous month. In particular, prices grew for cigarettes, building materials, educational services, cosmetics and hygiene items. In July prices for foodstuff grew 0.3% as compared with June. In particular, prices increased 4.5% for vegetables, 1.1% for meat and meat products, 1% for milk and dairy. This increase was in part smoothed by the decline in prices for pototoes by 11.7%, eggs by 1.1% and fish and fish cans by 0.3%.

The growth in prices for vegetables and dairy was caused by adverse weather conditions, namely severe drought, whereas prices for meat and meat products increased due to higher prices for feedstock as a result of the shrunk demand in the domestic market and orientation of the domestic produces at external markets. In July, 2012 prices for fuel of all kinds decreased by 0.3%. Namely, bottled gas prices fell 1.4% and combustibles went 0.6% down.

This decline was partially compensated by the 0.8% growth in prices for firewood. Prices for coal remained unchanged. In July administrative prices were the same as in June. Although railroad and air transportation prices changed slightly, they did not affect a dynamic of the administrative prices. Their annual rhythm was 5.7% in July, which was 0.2 p.p. down as compared with June.

The National Banks states it will continued strictly controlling the dynamics of the national economy and monitoring the international economic environment in order to ensure the goal of the mid-term monetary policy, namely to achieve and maintain the price stability by adequate using monetary policy instruments.