Russians’ estimate of current inflation at historic lows

According to the March inFOM survey commissioned by the Bank of Russia, Russians estimate the inflation for the last 12 months at 9.2%. This is the lowest level of perceived inflation for the whole period of observation. Moreover, since the beginning of the year, this indicator has not left the one-digit area. This became possible due to the slowdown of the actual inflation to record low 2.2%.

Inflation expectations, or Russian citizens’ forecast regarding the likely course that the prices will take during the forthcoming 12 months, are very low (8.5%). At the same time, the perceived inflation is gradually approaching the expectations. It demonstrates that Russians believe that future price dynamics will be more stable.

Although both survey indicators are still much higher than the official inflation, they continue to decline. A longer period of stable low prices is required for them to come closer to the inflation. Russians’ perception of inflation is still very much affected by volatility in prices of certain goods. As compared to February, in March the share of respondents, indicating that the prices of milk, vegetables, fruits, eggs and fish had grown, slightly increased. However, this share declined with regard to 25 categories of goods and services. Russians were less concerned about the prices of meat and fowl, cheese and sausages, tobacco and cigarettes, tea and coffee, vegetable oil, utilities and passenger transport.