Russia Inflation

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Russia: Inflation continues to moderate in October

November 5, 2015

In October, consumer prices rose 0.7% over the previous month, which was a tad up from the 0.6% increase in September. The reading was on par with 0.7% rise the market had expected. According to the Federal Statistics Office (Rosstat), the increase resulted from higher food prices and prices for clothing and footwear.

Annual inflation moderated from 15.7% in September to 15.6% in October, which marked a second consecutive decline. The result may be welcome news for Russian monetary authorities, who delayed further interest rate cuts in its latest meeting in October.

That said, inflation remains well above the Central Bank’s 4.5% inflation target for this year. In its last monetary policy statement, the Bank said that it expects inflation to fall below 7.0% in October 2016 and that it will be on track to reach the 4.0% inflation target in 2017. Therefore, as the Bank sees that the fall in inflation is in line with its forecast, monetary authorities indicated that a downward revision to the key monetary policy rate at one of their forthcoming meetings is in the cards. The Central Bank will hold the next—and last of the year—board meeting on 11 December.

The Central bank expects inflation to end 2015 at a rate of between 12.0% and 13.0%. For 2016, the Central Bank sees inflation ending the year at a rate of between 5.5% and 6.5%. FocusEconomics Consensus Forecast panelists see inflation ending 2015 at 11.7%, which is up 0.2 percentage points from last month’s forecast. For 2016, participants expect inflation to ease to 7.2%.


Author:, Senior Economist

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Russia Inflation Chart


Russia Inflation October 2015 1

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


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