The Central Bank of the Russian Federation lowered the estimate of trend inflation to 7.9% in November
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Estimates of trend inflation indicators in Russia, calculated on a five-year interval, decreased in November to 7.9% from 8.4% in October. Over a three-year time frame, the estimate fell to 9.34% from 9.63% in October, according to the macroeconomic bulletin (.pdf) Bank of Russia.
Trend inflation is an average of price increases over a long period of time. The Central Bank calculates this indicator on a five-year and three-year interval. The calculation of trend inflation is one of the options for cleaning the indicator from seasonal and one-time factors.
Today, December 19, the Central Bank also published an information and analytical a comment on the dynamics of consumer prices in November. It follows from it that consumer prices increased by 0.37% over the month, mainly due to the rise in prices for fruits and vegetables, air travel and foreign trips. Without taking into account the listed positions, the increase in consumer prices is near zero, the Bank of Russia noted.
In November, annual inflation dropped to 11.98%. Such dynamics was typical for the prices of most goods and services, the report says. At the same time, core inflation increased in November compared to October, but remained below 4%. The Central Bank said that the weak price dynamics indicates the predominance of disinflationary factors – restrained demand, high food supply and the ongoing pass-through of the strengthening of the ruble to prices.
The Central Bank noted that in the coming months, price dynamics will be influenced by pro-inflationary factors. In particular, the depreciation of the ruble in December, which exceeded 5% by the middle of the month. According to the forecast of the Bank of Russia, taking into account the ongoing monetary policy, annual inflation will decrease to 5-7% in 2023, return to 4% in 2024 and remain at this level in the future.
In December, the Bank of Russia saved key rate at 7.5%. This decision was made in connection with the moderate growth rates of prices and restrained consumer demand. At the same time, the head of the Central Bank Elvira Nabiullina worried an increase in inflation expectations of the population with a decrease in actual inflation for several months. Ms. Nabiullina also allowed annual inflation to slow down to 4% in the spring of 2023.
Read more about the decision of the Bank of Russia not to raise the rate in the material “Zero Signal”.
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