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In Russia accelerated trend inflation

В России ускорилась трендовая инфляция

Trend inflation in Russia accelerated in September 2019 to 5.3% from 5.28% in the previous month, follows from the materials of the Central Bank of the Russian Federation.

As pointed out by the regulator, “assessing underlying inflation in September 2019 rose slightly to 5.3% from 5.28% in August.”

The Bank of Russia stated that “a slight increase in the estimates of trend inflation with a marked reduction in the overall price growth may indicate a significant contribution of temporary factors in the slowdown of inflation in the consumer market.”

In this case, said the regulator, “assessing underlying inflation, calculated on a shorter three-year time interval, continued to decline, amounting to 3.72 percent in September after 3,86% in August”.

However, the highlight of the Central Bank, “is a “technical” slowdown in underlying inflation cannot be interpreted as the reduction of inflationary pressures”.

Recall that the indicator of the trend (underlying) inflation helps to separate the change in relative prices from the actual inflation, and to assess medium-term inflation risks.

We will remind, on the eve of the Bank of Russia information and analytical reviews did not rule out that the inflation forecast in the country by the end of the current year can be lowered at the next meeting of the Board of Directors of the Central Bank’s key rate.

As follows from the materials of the regulator, “in September 2019, consumer prices fell on average by 0.2%”. “The annual inflation rate slowed by 0.3 percentage points to 4% (from 4.3% in August — ed.). This is significantly below the forecast of Bank of Russia”, — the document says.

The Central Bank state that “the price dynamics was primarily influenced by the aggregate constraints, such as limited demand, outpacing the growth of supply of certain foods, the effects of the strengthening of the ruble, the slowdown in inflation in the countries trading partners.”

We add that, according to Rosstat estimates, consumer prices in Russia for the period from 1 to 7 October 2019 has not changed, as in the previous two weeks, and with the beginning of the year inflation reached 2.3%.

In September consumer prices in Russia decreased in September, 2019, by 0.2% in comparison with the previous month, in August. While yoy inflation in September slowed to 4% from 4.3% in August.

In 2018, consumer prices in the country increased by 4.3% (December to December 2017), and a year earlier the inflation rate was recorded at the historical low level of 2.5%.

The Ministry of economic development (MED) of the Russian Federation, according to the updated forecast, expects inflation for the year at the level of 3.8% instead of 4.3%.

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