Russia: Inflation falls to historical low in September

In September, consumer prices dropped 0.1% from the previous month, which followed August’s 0.5% decrease. According to the Federal State Statistics Service (Rosstat), the result was largely due to lower prices for food products.

Inflation came in at 3.0% in September, below both August’s 3.3% print and market expectations of 3.1% inflation. The print is the lowest in the country’s modern history and inflation is now further below the Central Bank of the Russian Federation’s target rate of 4.0%. Subdued price pressures are opening up space for the Central Bank to loosen monetary policy. Annual average inflation declined from 4.8% in August to 4.5% in September, another historical low.

Panelists see inflation ending 2017 at 3.8%, which is down 0.3 percentage points from last month’s forecast. For 2018, participants expect inflation to end the year at 4.0%, which is down 0.2 percentage points from last month’s forecast.