Russia: Inflation hits highest level since November 2016 in February
March 5, 2021
Consumer prices increased 0.78% over the previous month in February, accelerating from January's 0.67% rise. The result chiefly reflected elevated food price growth, amid soaring prices for fruits and vegetables. In contrast, prices for services and non-food items rose at a much softer pace.
Inflation shot up to 5.7% in February, from January’s 5.2%. February's result marked the highest inflation rate since November 2016. Meanwhile, the trend pointed up, with annual average inflation coming in at 3.9% in February (January: 3.6%). Core inflation rose to 5.0% from January’s 4.6%.
Commenting on the short-term outlook, Artem Zaigrin, economist at SOVA capital, said:
Although the effects of the FX pass-through might start having less of an impact on food prices, surging international food prices combined with COVID-19 and an outbreak of bird flu should push them up. […] At this point, we think the pressures from higher food prices might have a longer-term impact, with the first signs of deceleration coming at the end of 1Q21 or in early 2Q21. As the one-off effects from food prices start to subside, we would expect CPI to move gradually to the 4% level by YE21.”