Russia Inflation January 2016


Russia: Drop in inflation continues in January

January 13, 2016

In January consumer prices rose 1.0% over the previous month, which came in above the 0.8% increase registered in December. The reading was in line with market expectations and mainly resulted from higher food and non-alcoholic beverages prices as well as for clothing.

At the outset of the year, inflation continued to moderate. Inflation fell from 12.9% in December to 9.8% in January, which marked the fifth consecutive decline from a peak of 15.8% registered in August and the lowest level in 13 months. Inflation slowed significantly toward the end of 2015 and beginning of 2016, due to a base effect, as inflation began to record double-digit increases in December 2014 and January 2015. Inflation remains above the Central Bank’s target of 4.0%.

Due to the base effect, inflation is expected to continue slowing in the coming months. Nonetheless, upward pressures to consumer prices may come from a further weakening of the ruble.

The Central Bank indicated that it expects inflation to end 2016 at around 6.0% and that it will be on track to reach the 4.0% inflation target in 2017. The Consensus view of a panel of analysts surveyed by FocusEconomics is not in line with the Central Bank’s assessment. Panelists see inflation ending 2016 at 7.4%, which is unchanged from last month’s forecast. For 2017, participants expect inflation to ease to 6.0%.

Author:, Senior Economist

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Russia Inflation Chart

Russia Inflation January 2016 0

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Federal State Statistics Service (Rosstat).

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