Nabiullina allowed annual inflation to fall below 4% in spring
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Bank of Russia Governor Elvira Nabiullina said that annual inflation could slow down in the coming months. According to her forecast, in the spring the figure may fall by 4%. However, as the head of the Central Bank noted, annual inflation does not reflect the real situation much, since this indicator is “overloaded with past shocks.”
“In the coming months, it will continue to slow down. The most difficult months of this year in terms of price growth will come out of its calculation. When inflation is highly volatile, its annual rate says little about price pressures because it is overwhelmed by past shocks. In the spring, annual inflation may even drop below 4%, but this will practically not characterize the price dynamics here and now,” Elvira Nabiullina said at a press conference (quoted by Interfax).
As the main pro-inflationary risks, Mrs. Nabiullina singled out: increased inflationary expectations, shortage of labor in certain sectors of the economy, limited supply, an increase in the budget deficit, worsening foreign trade conditions.
Earlier today, the Central Bank kept its key rate at 7.5%. According to the head of the Bank of Russia, the regulator will continue to determine the trajectory of the key rate in order to reduce inflation to 4% by 2024.
By evaluation Central Bank, by December 12, inflation in Russia rose to 12.7% in annual terms. The indicator takes into account the indexation of utility tariffs. According to the regulator’s forecasts, in 2023 annual inflation will be at the level of 5-7%.
On the dynamics of prices in November – in the material “Lettuce Type Inflation”.
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