In September, consumer prices increased by another 0.87%

In September, consumer prices increased by another 0.87%, Rosstat reported on Wednesday. This is noticeably higher than analysts’ expectations; such a monthly increase is the maximum since the beginning of the year (in 2022 there was more only in the period from January to April).

Non-food products in September rose in price by 1.09%, food products by 0.86%. The cost of services increased by 0.61% (see chart). The main reason for the jump in prices for “non-food” is the rise in prices of petroleum products, medicines and clothing, for food – the seasonal increase in prices for fruits and vegetables, meat and bread.

In annual terms, inflation reached 6% in September. At the same time, food prices increased by 4.9%, non-food products by 4.6%, and services by 9.7%. Experts note that inflation has significantly deviated upward from the Bank of Russia’s forecast range of 6–7% at the end of the year. According to calculations by the authors of the Telegram channel “Hard Figures”, based on historical seasonal factors, adjusted for seasonality and annualized, inflation in September was 15%. “The Central Bank’s inflation forecast has lost its relevance. Judgments about the adequacy of monetary policy stringency may change, which will require an increase in the key rate by more than 100 basis points at the meeting on October 27,” they conclude. “Weekly inflation (first week of October.— “Kommersant”) 0.24% month-on-month and 4.9% since the beginning of the year – this is approximately 6.3% in annual terms. This removes the question of whether the Central Bank will increase the rate on October 27, leaving only the question of how much,” says Yegor Susin from Gazprombank.

The TsMAKP, however, insists that the current level of inflation is in a complex balance between systemic restraining factors (demand deficit, increasing as population consumption is drawn into stagnation) and stimulating factors (primarily the weakening of the ruble), as well as local processes in individual markets, most clearly manifested in the fuel sector. According to the center’s analysts, raising the key rate and curbing consumer lending are “ineffective in curbing inflation.” They propose to curb price increases in “crisis” markets (fuel, grain) and stabilize (ideally with some “pendulum” short-term strengthening) the ruble exchange rate through regulation of the foreign exchange market.

Artem Chugunov