The Central Bank announced the strengthening of pro-inflationary pressure

The Bank of Russia announced an increase in pro-inflationary pressure associated with sanctions, rising costs, and inflationary and price expectations remaining at an elevated level. According to report regulator, the monthly decline in prices in August decreased to a value close to zero, follows from the materials of the regulator.

“In August, annual inflation slowed down to 14.30%, with a further decline in annual price increases for many major groups of goods. Disinflationary influence continued to have a steady expansion of the domestic supply of food, pass-through of the strengthening of the ruble into prices, restrained consumer sentiment of households,” the document says.

At the same time, the seasonally adjusted monthly decline in prices fell to a value close to zero after 0.27% in July, the Central Bank said. The main contribution was made by the slowdown in the price of non-food products, which indicates the final correction in demand and prices after a surge in March.

“Pro-inflationary pressure is beginning to manifest itself to a greater extent,” the regulator noted. It is associated with continuing restrictions on the production and import of a number of non-food products, rising costs, and maintaining high levels of inflation and price expectations.

According to the forecast of the Bank of Russia, annual inflation will be 11.0–13.0% in 2022, and, taking into account the ongoing monetary policy, it will decrease to 5.0–7.0% in 2023 and return to 4% in 2024.

Daria Erozbek