Russia: Inflation eases to lowest level since January in April
Consumer prices increased 0.58% over the previous month in April, below the 0.66% increase logged in March. April’s result marked the softest rise in prices since October 2020.
Inflation fell to 5.5% in April, following March’s 5.8%. April’s reading marked the lowest inflation rate since January. Meanwhile, the trend pointed up mildly, with annual average inflation coming in at 4.4% in April (March: 4.2%). Core inflation came in at 5.5% in April from March’s 5.4% increase.
Commenting on the inflation outlook, Dmitry Dolgin, chief Russia economist at ING, notes:
“The April CPI reading and its composition suggest elevated CPI risks in the near term. We would not exclude some minor uptick in May, followed by CPI staying around 5.5% YoY until November, despite the favorable base effect. Only at the year-end the higher base effect should be strong enough to assure annual inflation falling to 4.5% YoY in December. At the same time, we acknowledge that given the risk profile those expectations look optimistic.”
Meanwhile, on monetary policy, Dmitry Dolgin, said:
“The pace and structure of the CPI growth, with higher contribution of non-food and services CPI, […] should keep the Bank of Russia concerned with the monetary component of inflation. We reiterate our call that the key rate, currently at 5.0%, has a 50-basis point upside this year, which may be realized in the next 2-3 board meetings.”