Prices for a broad range of products and services pick up in May
In May 2021, annual inflation increased to 6.0%.
The growth rates in consumer prices (seasonally adjusted) have accelerated to a record high since May 2020. This is communicated in the Bank of Russia information and analytical commentary Consumer Price Dynamics.
Accelerated growth in prices for many goods suggests that the increase in demand is outpacing the potential of expanding supply. Against this background, it is easier for businesses to pass costs through to prices, which have been growing since 2020 H2, partly on the back of the accelerated price growth in global commodity markets. For instance, the rate of non-food price growth continued to rise, this trend being especially noticeable in the construction materials market. At the same time, services price movements, primarily prices for tourism and transportation services, remain mixed largely due to the global situation with the pandemic.
Given the monetary policy pursued, annual inflation will return to the Bank of Russia’s target in the second half of 2022 and will remain close to 4% further on.