Inflation in the Russian Federation from August 29 to September 4 amounted to 0.11%

Inflation in the Russian Federation from August 29 to September 4 amounted to 0.11% after 0.03% from August 22 to 28, 0.09% from August 15 to 21, 0.10% from August 8 to 14, 0.01% from August 1 to August 7, Rosstat reported on Wednesday .

Since the beginning of the month, the price increase by September 4 was 0.06%, since the beginning of the year - 3.76%.

From the weekly data of the end of August and the beginning of September of this and last year, it follows that annual inflation in the Russian Federation on September 4 accelerated to 5.34% from 5.08% on August 28 and 4.30% at the end of July, if calculated from the weekly dynamics (judging by estimates of annual inflation in releases based on the results of boards of directors, the Central Bank adheres to this methodology). Rosstat will publish exact data on annual inflation at the end of August on September 8 in a report on price dynamics in August.

Assessment by the Ministry of Economic Development

The Ministry of Economic Development estimated annual inflation in the Russian Federation as of September 4 at 5.19%; the corresponding figures are given in the ministry’s review “On the current price situation.” As reported, the Ministry of Economic Development has been calculating annual inflation since February based on average daily data for the entire month of last year, and not specific weeks. The discrepancies in annual inflation estimates as of September 4 are due to the fact that in September 2022, deflation persisted at the beginning of the month, but then the dynamics reversed and, overall, for September 2022 inflation was recorded at 0.05%.

"In the week from August 29 to September 4, prices in the consumer market increased by 0.11%. In the food products segment, the rate of price growth increased (to 0.12% from 0.06% a week earlier) while deflation for fruits and vegetables slowed down (to 1.30%) and the continued increase in prices for other food products (0.24%). In the segment of non-food products, prices increased by 0.41% (after an increase of 0.18% a week earlier) due to the renewed rise in prices for electrical and household goods. devices, as well as an increase in the growth rate of prices for passenger cars and gasoline. In the service sector, prices continued to decline (by 0.28% after a decrease of 0.37% a week earlier) against the backdrop of a continued decline in prices for air tickets for domestic flights (by 4.94%). )," says the ministry's review.

Key rate

As reported, on August 15, the Bank of RUSSIA at an extraordinary meeting of the board of directors raised the key rate by 350 basis points, to 12%.

In a press release on this matter, the Central Bank did not give the traditional signal about the future direction of monetary policy. In the statement following the extraordinary meeting of the board of directors, only the basic phrase remained: “The Bank of Russia will make further decisions on the key rate, taking into account the actual and expected dynamics of inflation relative to the target, the process of structural restructuring of the economy, as well as assessing risks from internal and external conditions and reactions financial markets on them."

Later, the Bank of Russia announced that if pro-inflationary risks increase, an additional increase in the key rate is possible. “The Bank of Russia will make further decisions on the key rate based on the extent to which the actual and expected dynamics of inflation relative to the target, the process of structural restructuring of the economy, as well as risks from internal and external conditions and the reaction of financial markets to them will be able to further increase the risk inflation deviation upwards from the target near 4% in 2024 ,” the regulator said.

On September 5, Deputy Chairman of the Bank of Russia Alexey Zabotkin, in a conversation with journalists, noted that pro-inflationary risks remain significant; the Central Bank does not rule out another increase in the key rate at its meeting on September 15.

“Pro-inflationary risks remain significant. We will clarify our forecast, and the updated forecast will be published as part of a press release following the meeting on September 15. The decision will be based on this forecast,” Zabotkin said, adding that “we do not exclude the possibility of an increase ( key rate on September 15 - IF)".

As reported, the Central Bank predicts that annual inflation in the Russian Federation in 2023 will be 5.0-6.5% and will return to 4% in 2024. Zabotkin noted on September 5 that the current price dynamics are still closer to the upper limit of the Central Bank’s interval forecast of 5-6.5% for 2023.

The forecast of the Ministry of Economic Development of the Russian Federation from April 2023 assumes inflation at the end of the current year at the level of 5.3% (to be clarified in the near future).

Finance Minister Anton Siluanov recently said he expects inflation in 2023 to be around 6%.

The consensus forecast of economists surveyed by Interfax in early August is 6.0% for inflation in 2023 (increased from 5.7% in a survey in early July), for inflation in 2024 - 4.8% (increased from 4.6% according to a survey a month ago).