Inflation pressures continue to mount (Nov 07)

Inflationary pressures are continuing to build across much of Emerging Europe. Strong growth is causing capacity constraints to bite and has pushed up core inflation in the Baltics, Balkans and Russia. But food prices are also rising. While this is partly a global phenomenon, poor regional harvests have exacerbated the problem. Consequently, the Central Bank of Russia has missed its inflation target for this year and inflation in Bulgaria and Latvia has risen above 12%.