Russia Inflation

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Russia: Inflation soars to three and a half-year high

December 10, 2014

In November, consumer prices jumped 1.3% over the previous month, which came in well above the 0.8% increase observed in October. The print, which overshot the 1.1% rise the markets had expected, represented the fastest monthly increase since January 2011. November’s result continued to reflect the consequences of the food imports’ restriction 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. The recent sharp depreciation of the ruble was also a key driver behind the monthly increase.

As a result of the monthly increase, annual inflation jumped from 8.3% in October to 9.1% in November, which represented the highest level since June 2011. At the current rate, inflation remains well above the Russian Central Bank’s 1.5% upper ceiling of its 5.0% inflation target.

Core consumer prices—they exclude short-term price changes influenced by administrative and seasonal factors—rose 1.0% in November over the previous month, up from the 0.8% increase tallied in October. Annual core inflation rose from 8.4% in October to 8.9% in November, the highest level since October 2009.

Russia is likely to continue experiencing ballooning inflation going forward as a result of the ban on imports of meat, poultry, dairy products, vegetables, fruits and other products from some Western countries. In addition, the Central Bank’s recent decision to end any currency interventions in the foreign exchange market has had a strong impact on inflation and inflation expectations due to pass-through effects from the weakening ruble. According to analysts, historically, exchange rate pass-through effects on inflation take from three to six months. Hence, the current currency crisis in Russia is expected to impact consumer prices during the first half of 2015.

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 5.5%, which is up 0.3 percentage points from last month’s forecast.


Author:, Senior Economist

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Russia Inflation Chart


Russia Inflation November 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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