Russia Inflation March 2017


Russia: Inflation falls to lowest level in March in nearly five years

April 6, 2017

In March, consumer prices rose 0.1% from the previous month, undershooting both the 0.2% increase in February and the 0.2% increase the markets had expected. In a statement, the Federal State Statistics Service (Rosstat) stated that March’s result reflected softer price increases in most food items—due to a more abundant supply of local crops—and a decrease in most imported goods, given the strengthening of the ruble.

Inflation fell from 4.6% in February to 4.3% in March, which was the lowest level since June 2012. Russia’s Central Bank has played an important role in bringing down inflation as well as in the stabilization of the Russian ruble. Given the faster-than-expected decline in inflation, the Central Bank unexpectedly cut the monetary policy rate by 25 basis points to 9.75% at its March meeting. Although the Central Bank offered prospects for further cuts in the interest rate, it cautioned that there are still risks that could cause inflation to miss the target. Among these risks are an increase in inflation expectations, Russian consumers going on a spending spree, and an increase in volatility in financial markets and commodity prices, which can modify expectations regarding the exchange rate and inflation.

For this year, Russian monetary authorities are confident that inflation will be on track to reach the 4.0% target at the end of the year and to hover around it in 2018. Panelists see inflation ending 2017 at 4.3%, which is down 0.2 percentage points from last month’s forecast. For 2018, participants expect inflation to decline to 4.2%.

Author:, Senior Economist

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Russia Inflation Chart

Russia Inflation March 2017

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

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