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.
Author: Ricardo Aceves, Senior Economist