Russia Inflation

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Russia: Inflation continues to fall in June

June 4, 2015

Russia’s consumer prices increased 0.20% over the previous month, which came in below the 0.35% rise registered in May. The reading also undershot the 0.30% increase the markets had expected and represented the weakest monthly increase since August 2013. According to the Federal Statistics Office (Rosstat), the moderation in consumer prices stemmed from a slower increase in prices for fresh food. The strong increases in consumer prices in previous months was mainly fueled by the rapid depreciation of the Russian ruble, which made imports more expensive. However, in recent weeks the ruble has stabilized.

As a result of the more moderate increase in consumer prices, annual inflation continued to fall in June. After it reached its peak rate of 16.9% in March, it began to drop. Inflation fell from 15.8% in May to 15.3% in June and now remains at levels last seen at the beginning of the year. The result is likely to be welcoming news for Russian monetary authorities, which had indicated moves to continue lowering the main monetary policy rate in the coming months as inflation continues to fall.

At the moment, inflation remains well above the Russian Central Bank’s 4.5% inflation target. However, in its last monetary policy statement, the Central Bank said that it expects inflation to fall more rapidly than previously estimated and sees it falling below 8.0% in 2016 and hit its 4.0% target for 2017.

Moreover, the Ministry of Finance expects inflation to end 2015 below 12%. FocusEconomics Consensus Forecast panelists see inflation ending 2015 at 12.6%, which is down 0.2 percentage points from last month’s forecast. For 2016, participants expect inflation to ease to 7.3%.


Author:, Senior Economist

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Russia Inflation Chart


Russia Inflation June 2015 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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