Russia Inflation

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Russia: Inflation rises to highest level in three years in September

October 3, 2014

In September, consumer prices jumped 0.7% over the previous month, which was above the 0.2% increase observed in August. The reading exceeded market expectations of a 0.6% increase and mainly reflected higher prices for food stuffs, particularly for meat, fruits and vegetables. According to analysts, the impact of the imports’ ban that the Russian government has imposed in early August in retaliation to the sanctions imposed to the country over the crisis in Ukraine has been stronger than expected.

As a result of the monthly increase, annual inflation accelerated from 7.6% in August to 8.0% in September, which marked the highest level since August 2011. The Central Bank has already stated that it is unlikely that inflation will move toward the Bank’s 5.0% target before the end of the year.

Core consumer prices, which exclude short-term price changes that are influenced by administrative and seasonal factors, added 0.9% in September, which was up from the 0.6% increase tallied in August. Annual core inflation increased from 8.0% in August to 8.2% in September, which is the highest level since July 2011.

Russia is likely to continue experiencing rising inflation going forward as a result of the ban in imports of meat, poultry, dairy products, vegetables, fruits and other products from the European Union, Norway, the United States, Canada and Australia. Moreover, in the medium-term, the removal of currency controls aimed at fostering flexibility in the foreign exchange market is also likely to have an impact on inflation.

The Ministry of Economic Development expects inflation to end this year at 7.2%. The projection was revised up from its previous 6.0% estimate. For 2015, the Ministry sees inflation easing to 6.5%, which was also revised from its previous 5.0% projection. FocusEconomics Consensus Forecast panelists see inflation ending 2014 at 6.5%, which is unchanged from last month’s forecast. For 2015, participants expect inflation to ease to 5.2%.


Author:, Senior Economist

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Russia Inflation Chart


Russia Inflation September 2014 0

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


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