1. WHAT’S WRONG WITH RUSSIAN IFLATION? A. Illarionov, CATO Institute, Washington, USA Institute of Economic Analysis, Moscow, Russia American Enterprise Institute, Washington, DC, December 18, 2007 © CATO Institute, Institute of Economic Analysis www.cato.orgwww.cato.org, www.cato.ru, www.iea.ru www.cato.ruwww.iea.ru www.cato.orgwww.cato.ruwww.iea.ru

2. © ИЭА 2 Inflation forecasted and actual: Authors/Years20072008 Ministry of Economy7,0-8,0 6-7 Central Bank6,5-8,0 6-7 Actual in November 2007 11,6 ?

3. © ИЭА 3 Annual CPI and other inflation indices, %

4. © ИЭА 4 Annual CPI and its components, %

5. © ИЭА 5 Food or budget? Structural or macroeconomic?

6. © ИЭА 6 Price of food so far did not deviate significantly from the price trends of other commodities.

7. © ИЭА 7 Annual indices of M2 and Inflation with lags from 18 to 25 months.

8. © ИЭА 8 Russia is at 21 st place among 180 countries by annual CPI index in 1999-2006.

9. © ИЭА 9 Russia is at 2 nd place among 180 countries by increase in US dollar prices in 1999-2006.

10. © ИЭА 10 Russia is at 3 rd place among 180 countries by increase in real effective exchange rate (comparative prices) in 1999-2006.

11. © ИЭА 11 Russia is at 9 th place among 165 countries by annual broad money supply growth rate in 1999-2006.

12. © ИЭА 12 Russia is at 13 th place among 161 countries by budget balance as % of GDP in 1999-2006.

13. © ИЭА 13 But it is only at 133 rd place among 146 countries by non-oil & non-gas budget balance as % of GDP in 2006.

14. © ИЭА 14 Federal government non-interest expenditures as % of GDP has almost doubled from 2000 to 2007.