OREANDA-NEWS. June 15, 2009. The Producer Price Index (PPI) slowed to 0.6% MoM in May, backed by a slowdown in fuel prices, according to figures from Rosstat, reported the press-centre of OTKRITIE FC.

The corresponding figure for April was 2.4%. Meanwhile, the PPI for the manufacturing sector was negative (-0.5%),  further confirmation of the continued contraction of demand. Producer prices have risen 7.7% YTD.

View: We believe this modest growth in producer prices has positive implications for the government, as it will support nominal tax collections, providing the government with some spending flexibility while limiting potential budget deficits. On the other hand, this PPI reading does not put excessive pressure on the CPI.