Russia: Inflation cools for the first time in six months but remains elevated in April
Latest reading: Inflation inched down to 10.2% in April from March’s 10.3%, marking the first dip in price pressures since October 2024. Still, April’s figure remained entrenched above the 4.0% target of the Central Bank of Russia (CBR): Fiscal stimulus and a smaller harvest continued to fan cost pressures, driving faster rises in food goods prices. Still, non-food goods and services prices rose at a softer pace in April. Moreover, recent currency strength plus signs of easing labor shortages likely kept prices in check more broadly.
Accordingly, the trend pointed up mildly, with annual average inflation coming in at 9.3% in April (March: 9.1%). Meanwhile, core inflation dropped to 9.2% in April from March’s 9.7%.
Finally, consumer prices increased 0.40% from the previous month in April, slowing down from March’s 0.65% increase. April’s result marked the softest rise in prices since August 2024.
Outlook: Our panel expects disinflation to continue steadily through Q4 2026 as the base effect strengthens and the effect of a cumulative 500 basis points of rate hikes over the past year permeates through the real economy, tightening credit conditions and incentivizing households to save. Still, inflation is seen hovering around 2024 levels this year—more than double the CBR’s target—and only falling below the pre-pandemic 10-year average of 6.9% in 2026, kept elevated by sanctions and expansionary fiscal policy. A long-lasting ceasefire easing trade restrictions and labor shortages is a downside risk.