Deflation in Russia slowed to 0.13% over the week

Weekly deflation in Russia from August 30 to September 5 slowed to 0.13% after 0.16% a week earlier. Since the beginning of the year, consumer prices have risen by 10.24%. At the same time, since the beginning of September, consumer prices in the country have decreased by 0.09%. This comes from the report Rosstat.

As follows from the report of the Ministry of Economy (.pdf), in annual terms, inflation fell to 14.08%. This was due to a decrease in prices for food products, in particular, due to a fall in prices for fruits and vegetables (-3.37%). According to the Ministry of Economy, prices are falling in all sectors of the consumer market.

In June, Minister of Economy Maxim Reshetnikov spokethat the Russian economy is slipping into a deflationary spiral: situations where the reduction of money in the economy leads to a reduction in production and lower prices. The decline in prices continued throughout July and August. The Central Bank admitted that by the end of 2022, inflation in annual terms could drop to 12%.

On September 16, a scheduled meeting of the Board of Directors of the Central Bank on the key rate will be held. On July 22, the regulator lowered the figure to 8%. The decision to further reduce the rate, according to Elvira Nabiullina, will depend on the actual and projected dynamics of inflation, structural adjustment of the economy, as well as risks from internal and external conditions for financial markets.

Read more about why Russia continues to reduce prices, read the material “Deflation added drivers”.

Anastasia Larina