Nabiullina allowed inflation targeting below 4%
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Russia’s inflation target of 4% is achievable, but at some point the target may be lowered. This was stated by the Chairman of the Central Bank, Elvira Nabiullina, speaking at the XX International Banking Forum, a Vedomosti correspondent reports.
“Achieve, and maybe reduce,” she said, responding to the words of the chairman of the board VTB Andrey Kostin that “the inflation target of 4% is inevitable.”
According to Nabiullina, in the future the inflation target could be lowered to 1% – this would be a “good goal”, but Russia is not yet ready for such a step.
On September 25, at a government meeting dedicated to budget priorities for 2024-2026, Minister of Economic Development Maxim Reshetnikov introduced forecast according to which inflation growth will slow down to 4.5% by the end of 2024, and in 2025 it will reach a level of 4%.
In addition, in September the Ministry of Economic Development increased inflation forecast in 2023 in Russia from 5.3% in the April version to 7.5%. As the ministry explained, the change in the forecast is due to the volatility of the ruble. In September, the Bank of Russia also predicted that annual inflation would continue to rise in the coming months due to increasing price pressure.
On September 15, the Central Bank raised the key rate by 1 percentage point to 13%. This is the third consecutive rate increase in a month and a half: first, the Central Bank raised the rate at a meeting on July 21 by 1 percentage point to 8.5%, and then unscheduledly increased the rate on August 15 immediately to 12%.
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