Russia: Inflation steps up in July on tariffs and drought
August 3, 2012
In July, consumer prices rose 1.2% over the previous month. The result marked the highest month-on-month reading since January last year, coming in above the 0.9% increase recorded in June but below market expectations of a 1.4% rise. The increase was mainly driven by a pick-up in prices for services, amid a planned increase in regulated tariffs, which took effect in July. In addition, food prices rose on the back of the drought which affected the country in July and which is expected to last until August. As a result, annual headline inflation rose from 4.3% in June to 5.5% in July, the highest reading in seven months. The core consumer price index, which excludes short-term price changes influenced by administrative and seasonal factors, rose a more subdued 0.5% in July, slightly above the 0.4% rise recorded in June. As a result of the increase, annual core inflation inched up from June's 5.2% to 5.3% in July.