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Russia 2006 inflation to stay at 9% or under - ministry

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MOSCOW, August 7 (RIA Novosti) - Inflation will not exceed 9% by the end of 2006, a Russian senior economics ministry official said Monday

"The inflation forecast for 2006 remains 9%," said Andrei Klepach, head of the ministry's department on macroeconomic forecasts.

Klepach said August-September, when a traditional seasonal decline is registered in prices for fruit and vegetables, would see deflation or a minor price rise. But he said prices would grow insignificantly after September.

"... We have a chance to keep inflation below 9%," Klepach said, adding that the inflation dynamics would depend on personal incomes and the supply of goods.

He said imported products continued to dominate on the Russian market, hampering competition and broadening the gap between wholesale and retail prices.

He also said gasoline prices had risen more than expected in July.

The State Statistics Service reported in late July that gasoline appreciated 0.2% within July 10 and 16, reaching an average of 16.54 rubles ($0.6) per liter.

The government plans to contain inflation at 9% in 2006 (compared to 10.9% in 2005), having upped the target from the initial 8.5%, and to cut it further to 6-7% in 2007, and to 4-4.5% in 2008.

The State Statistics Service said Monday consumer prices had risen 0.7% in July and 6.9% in January-July 2006. The top statistics body said consumer price inflation stood at 0.5% in July 2005 and 8.5% in January-July 2005.

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