Russia Inflation February 2022

Russia: Inflation comes in at highest level since January 2016 in February

Consumer prices rose 1.17% in February over the previous month, picking up from January’s 0.99% rise. February’s figure marked the highest reading since March 2015. Notably, February’s data does not yet account for the shock due to international sanctions unleashed on the Russian economy in response to its invasion of Ukraine.

Inflation jumped to 9.2% in February, which was up from January’s 8.7%. February’s figure was the highest inflation rate since January 2016. Meanwhile, the trend pointed up, with annual average inflation coming in at 7.3% in February (January: 7.0%). Finally, core inflation rose to 9.7% in February, from the previous month’s 9.2%.

Commenting on the inflationary backdrop and outlook, Artem Zaigrin, Chief Economist at SOVA Capital, said:

The ruble has depreciated nearly 50% since the end of February […] Fewer goods amid disruptions in supply chains are likely to amplify the pass-through effect of the ruble’s depreciation. The re-pricing of existing products is likely to continue over the next several weeks, and we do not rule out that inflation could hit 20% by the end of March. The next several months are likely to define the new trajectory, which could depend on the duration of the tensions in Ukraine; additional restrictions (if any); the speed at which the economy adapts to the new conditions; and how loose the fiscal and monetary policy stance is.”

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