BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/25
As the effects of the price spike caused by the ruble’s dive in the final months of 2014 have faded, inflation has gradually subsided in recent months. Moreover, the ruble enjoyed a period of strengthening between early February and end-May, while consumer demand continued to contract. The CBR also noted that most of the inflationary impact from Russian counter-sanction import bans introduced in August 2014 has been digested. However, as of end-May, consumer prices were still nearly 16 % higher than a year earlier. Food price inflation traditionally slows in the summer months as domestic produce reaches the market. On the other hand, the hikes of 7.5−10 % in rates for regulated utilities and services will add to inflationary pressures when they take effect on 1 July. The CBR stated that a possible relaxation of fiscal policy could also be an inflation risk.
Russian 12-month inflation and CBR key rate, %
Source: Macrobond