Inflation slowdown continues

Inflationary pressure, defined as growth in prices for the consumer basket components which are the most resistant to the impact of temporary factors, is holding near 4%. This will help slow down annual inflation to 4% and anchor it near this level in the future. These are the findings by the authors of the latest issue of the Talking Trends, the Bank of Russia’s Research and Forecasting Department bulletin.

Annual inflation expectedly decelerated in August on the back of temporary disinflationary factors and has been near 4%. At the same time, monthly growth in prices for the components which are the most resistant to the impact of temporary disinflationary and proinflationary factors remains close to the level that corresponds to 4% annual inflation. This suggests that inflation will stabilise near 4% in the established monetary conditions as temporary disinflationary and proinflationary factors abate.

The acceleration of seasonally adjusted monthly growth of corporate lending coupled with the softening of monetary conditions points to an ongoing trend towards the expansion of corporate lending in the months to come. Growth of retail lending is slowing from the elevated levels seen at the year start towards more stable readings.

The views and recommendations expressed in the bulletin do not necessarily reflect the official position of the Bank of Russia.

20 September 2019

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