Russia: Inflation falls to lowest level since October 2024 in July
Latest reading: Inflation came in at 8.8% in July, down from June’s 9.4%, marking the lowest rate since October 2024. The moderation was broad-based, as food, non-food items and services all saw softer price increases, likely due to cooling domestic demand and earlier monetary tightening.
In addition, annual average inflation came in at 9.4% in July (June: 9.5%), while core inflation fell to 8.5% (June: 8.7%).
Finally, month-on-month consumer prices increased 0.57% in July, up from June’s 0.20% increase, marking the highest reading since March.
Panelist insight: Goldman Sachs’ Clemens Grafe noted:
“We continue to expect annual inflation to decline to 7.1% yoy by year-end. This is despite our view that the RUB will depreciate outside of the forwards as the weakness in economic activity translates into further disinflationary pressure. This should allow the CBR to cut rates to 13% by year-end.”