Russia: Inflation comes in at highest level since August 2016 in June
July 8, 2021
Consumer prices rose 0.69% in June over the previous month, broadly in line with May's 0.74% increase. The overall upturn was broad-based with prices for food products, non-food goods and services growing at a similar pace.
Inflation rose to 6.5% in June from May’s 6.0%. June's result marked the highest inflation rate since August 2016. As a result, annual average inflation increased to 4.9% in June (May: 4.6%). Core inflation rose to 6.6% in June, from the previous month's 6.0%.
Commenting on the result, Dmitry Dolgin, chief Russia economist at ING, said:
“Overall, the CPI performance in June and early July supports our recent decision to worsen Russia's CPI and the monetary policy outlook [...] We would not exclude further acceleration in the CPI rate to 6.6%-6.7% yoy in July, with deceleration possible only in the very end of the year […] The balance of risks to our new year-end CPI target of 5.7% yoy is still tilted to the upside. The base case for the 23 July rate hike is 75bp, and the highest discussed 100bp also cannot be fully ruled out.”