The government claims that inflation in 2010 was within the official target, at 7.6%. However, official figures understate the true level of inflation, which is likely to be as much as twice as high-we estimate it at 15% in 2010. The authorities will continue to attempt to limit inflation by the imposition of price controls on basic foodstuffs and energy. Lower global commodity prices had a disinflationary impact in 2009, but this trend reversed in 2010 (particularly because food prices rose as leading grain-exporting countries in the region were affected by drought), and commodity price trends will continue to exert upward pressure on prices in 2011. A continuing depreciation of the local currency will also boost imported inflation. Robust money supply growth, as the government increases wages and benefits further, will also fuel inflation. We expect average annual inflation to pick up to 16% in 2011. A stabilisation in global food prices will lead to a slowdown to 14% in 2012.