Russia anti-inflation policy not working-economists

By Maria Kiselyova and Gleb Bryanski

MOSCOW, Jan 31 (Reuters) - The Russian government's anti-inflation measures did not work and consumer price growth will exceed the government's target for a fifth year in a row, a poll of 10 economists showed on Thursday.

Economists saw the consumer price index (CPI) rising by a median of 2.3 percent in January and by 10.3 percent for the whole year, well above the government's official target of 8.5 percent.

"The government's efforts to curb inflation are a mere smoke screen. The curbs on the government's spending would be the most effective measure but the government is unlikely to use it," said Troika Dialog economist Anton Stroutchenevski.

For a full table, please, click on [ID:nMSK000225].

Inflation returned to double digits in 2007 after slipping into single digits in 2006. Last time Russia met its inflation target was in 2003 when the CPI index grew by 12.0 percent.

The government plans to embark on a spending spree and raise wages and pensions ahead of the presidential election in March, which President Vladimir Putin's chosen successor Dmitry Medvedev looks set to win. The central bank used the rouble exchange rate against the dollar/euro currency basket to curb inflation, claiming that a 1.0 percentage point of the rouble appreciation knocks 3 basis points off the inflation rate.

The central bank runs a managed float of the rouble keeping it stable against the basket and said it was reluctant to continue its appreciation policy.

"No one wants to appreciate the rouble but the other question is will someone be able to," said VTB analyst Nikolai Kashcheyev referring to potential revenue losses in export sectors.