Movement in food prices drives inflation down
Monthly consumer price growth was consistently low in March. This was primarily influenced by food prices: according to the latest issue of the Bank of Russia’s information and analytical notes entitled Consumer Prices, seasonally adjusted prices for fruit, vegetables, sugar and vegetable oils have dropped.
Prices for services remained largely unchanged: a decline in railway transportation tariffs was off-set by an increase in other prices. Growth in prices for non-food goods retained the moderate pace observed in February.
Inflation slowdown continues to be shaped in large part by demand-side constraints. A gradual rebound in economic activity will be instrumental in overcoming these constraints, however, it is expected that this will not pose any considerable risk of overshooting the 4% inflation target in 2017.
Though somewhat lessened, inflation risks are still present. In