Rosstat recorded a slowdown in weekly inflation

Inflation in Russia in the week from February 14 to 20 slowed to 0.06% after 0.18% in the period from February 7 to 13 and 0.26% from January 31 to February 6, according to data from Rosstat. Since the beginning of February, consumer prices have increased by 0.46%, since the beginning of the year – by 1.3%.

Inflation in annual terms by February 20 slowed to 11.36% from 11.61% a week earlier, follows from the review of the Ministry of Economic Development “On the current price situation.” The main contribution to the slowdown in inflation in the reporting week was made by a slowdown in the growth of food prices (to 0.11% from 0.35% a week earlier) due to a slowdown in the rise in prices for fruits and vegetables and a renewed decline in prices for other products, the ministry explained.

From February 14 to February 20, prices for fruits and vegetables increased by an average of 1.2%, including onions – by 6.9%, tomatoes – by 4%, bananas – by 3.8%. At the same time, prices for cucumbers fell by 2.1%.

At the end of January, inflation slowed down to 11.77% in annual terms from 11.94% in December, and in monthly terms it accelerated to 0.84% ​​from 0.78% in December.

According to the forecast of the Ministry of Economy, by the end of 2023, inflation should be 5.5%. The Bank of Russia expects it to be in the range of 5-7%. In 2022, inflation was 11.94%, its peak was in March – 7.61% (after 1.17% in February and 0.99% in January).

President Vladimir Putin, during his address to the Federal Assembly on February 21, said that in the second quarter of this year, inflation in Russia will approach the target level of 4%.

So far, the main trends of the past week are generally preserved – in addition to fruits and vegetables, price growth is supported by services, the chief economist noted “BCS The world of investments” Natalia Lavrova. In general, this year the dynamics of prices for services may be higher than inflation in the food and non-food sectors (6.8% in December 2023 against 4.9% in December 2022), she expects. This will be the result of the mobilization factor and the outflow of the population, leading to an increase in labor costs, the expert explained.

Weekly data show a noticeable slowdown in inflation, which, against the background of the weakening ruble, indicates that the influence of weak consumer demand will continue, Denis Popov, chief analyst at PSB, added. At the same time, the dynamics accumulated since the beginning of the year and since the beginning of the month remains increased compared to the norm, said Valery Vaysberg, director of the analytical department of the Region Investment Company.

The annual inflation rate by the end of February will be about 11.2%, Popov estimated. At the same time, by the end of March, it will slow down to 3.9%, mainly due to the effect of a high statistical base, the expert expects. In the near future, fruit and vegetable products and services (tourism, transport, etc.) may show the most dynamic price growth, he believes. Starting from May, a pronounced seasonal deflation in the food segment is possible, the expert added.

Annual inflation in February may approach the range of 11.1-11.2%, and at the end of the quarter it will sharply drop below 4% as a result of the base effect, Lavrova agrees.

In the last 2 months, there has been a fairly significant weakening of the ruble, and budget spending is ahead of seasonality, reminded the chief analyst Sovcombank Natalya Vashchelyuk. The dynamics of inflation in such conditions can be characterized as restrained, she believes. Most likely, the relatively low consumer activity affects, the expert suggests.

In February, prices may rise by 0.5-0.6%, Vashchelyuk expects: in March, taking into account the weakening of the ruble and outpacing the dynamics of budget spending, inflation will probably also be increased (0.6%-0.7% per month). In annual terms, the figure may be 11.2% and 4%, respectively, the expert predicts.