Bank of Japan cautious on deflation

BEIJING, Sept. 17 (Xinhuanet) -- Kazuo Ueda, a Bank of Japan policy board member, said the world's second-largest economy is not likely to end a six-year bout of deflation in coming months.

"Looking ahead to the next several months, consumer prices may touch zero temporarily, but they aren't likely to achieve stable gains," he said in a speech to executives in Shizuoka, in central Japan.

The Bank of Japan last week kept interest rates almost at zero to bolster growth. The bank also kept the upper limit of its target for reserves available to banks at 35 trillion yen (US$318.2 billion) and maintained monthly bond purchases from lenders at 1.2 trillion yen (US$10.90 billion).

Japan unexpectedly cut its estimate for growth in the second quarter to a 1.3 per cent annual pace from the initial 1.7 per cent estimate because manufacturers slashed inventories and the government lowered investment.

"The pace of growth is slowing down a bit," he said. Even so, the economy "may keep expanding at a pace a bit higher than its potential growth rate" of about 2 per cent a year.

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Bulgaria Marks 0.4% Deflation in August

Bulgaria's Consumer Prices Index (CPI) recorded a deflation of 0.4% in August, Bulgaria's National Statistics Institute announced on Wednesday.

Inflation during the first eight months of the year 2004 cumulated to 0.9%. August 2003 - August 2004 inflation is 6.7%.

Prices of food products went down by 1.7% m/m and prices of non-food products increased by 0.4%. Over the same period house rents marked an increase of 0.5%.

Prices of services and fuels also increased over the period.

Read the story at Novonite.com

Moscow deflation at 0.1% in August vs. 0.4% inflation in Russia; St. Petersburg prices rose 0.3%.

Moscow deflation stood at 0.1% in August vs. 0.4% Russia's inflation, according to the Federal State Statistics Service. St. Petersburg prices increased 0.3% in August.

Moscow consumer prices have risen 7.9% from early this year, St. Petersburg prices were up 8.7% vs. 7.6% Russia's average.

The cost of Moscow min. food basket lowered 3.3% in August but widened 4.9% from early this year to stand at 1,440.8 rbl. St. Petersburg min. food basket lost 1.9% in August but increased 6.2% from early this year to a total of 1,282.6 rbl.

Read the article at GatewaytoRussia.com