Russia Inflation

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Russia: Inflation ends 2014 at the highest level since 2008

December 31, 2014

In December, consumer prices jumped 2.6% over the previous month, which doubled the 1.3% increase observed in November. The result slightly overshot the 2.5% rise the markets had expected and represented the fastest monthly increase since May 2008. December’s result continued to reflect the consequences of the food imports’ restriction that the Russian government has imposed in early August in retaliation to the sanctions imposed on the country over the crisis in Ukraine as well as the sharp depreciation of the Russian currency, which has significantly pushed up food prices.

Annual inflation closed 2014 at 11.4%, which represented the highest level since 2008, when inflation crept up 13.3%. The reading was well above the 6.5% increase observed in 2013. At the current rate, inflation remains well above the Russian Central Bank’s 5.0% inflation target.

Russia is likely to continue experiencing rising inflation in the coming months due to the Russian embargo on food imports from some Western countries. In addition, the ruble’s sharp depreciation will continue having a significant impact on inflation and inflation expectation in the first half of 2015.

Russia’s Finance Ministry expects that the inflation rate will remain at double digits through 2015. The Ministry expects inflation to end 2015 at 10.0%. FocusEconomics Consensus Forecast panelists see inflation ending 2015 at 7.5%, which is up 0.6 percentage points from last month’s forecast. For 2016, participants expect inflation to ease to 6.0%.


Author:, Senior Economist

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Russia Inflation Chart


Russia Inflation December 2014 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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