Russia Inflation

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Russia: Inflation rises for second consecutive month

September 7, 2015

Consumer prices in Russia rose 0.4% in August over the previous month. Although the increase slowed over July’s 0.8% rise, the reading overshot the 0.2% rise the markets had expected. According to the Federal Statistics Office (Rosstat), the moderation stemmed from lower prices for food products, while prices for services increased.

Annual inflation accelerated in August to 15.8% from 15.6% in July and marked a second consecutive rise. The result also confirmed the momentum change. After it peaked in March at nearly 17%, inflation began to fall, which reflected mainly the gradual strengthening of the Russian ruble. However, falling inflation failed to materialize after the ruble began to lose value against the greenback in July and then declined sharply in August. The increase in inflation in August were not welcome news for Russian monetary authorities, who are likely to delay further interest rate cuts in the coming meetings.

Inflation remains well above the Central Bank’s 4.5% inflation target for this year. However, in its last monetary policy statement, the Bank said that it expects inflation to fall more rapidly than previously estimated and sees it falling below 8.0% in 2016 and hit its 4.0% target for 2017. Should inflation continue rising in the coming months, monetary authorities are likely to revised their inflation forecasts.

Moreover, the Ministry of Finance expects inflation to end 2015 below 12%. FocusEconomics Consensus Forecast panelists see inflation ending 2015 at 11.7%, which is up 0.2 percentage points from last month’s forecast. For 2016, participants expect inflation to ease to 7.2%.


Author:, Senior Economist

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Russia Inflation Chart


Russia Inflation August 2015 4

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


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