Inflation settles down near the target

In May, annual inflation remained unchanged month on month and settled near the target level. Annual inflation will remain close to 4% in the coming months, notes the latest release of the Bank of Russia’s information and analytical commentary Consumer Price Trends.

May saw continued decline in the annual growth of prices of non-food goods, services and food products excluding vegetable and fruit prices. Following a non-typical drop in vegetable and fruit prices in January-March (seasonally adjusted), they rose in April-May as a result of the depletion of the previous year's vegetable stocks and a delay in the planting season amid unfavourable weather conditions.

In the coming months, stable components of inflation will continue to fall; this will mainly concern prices for non-food goods in the consumer basket. Weather conditions may produce a one-off effect on inflation. At the same time, experts do not anticipate any material deterioration in the vegetable and fruit market: a possible drop in the harvest of field vegetables caused by unfavourable weather conditions during sowing time may be offset by the output of greenhouse vegetables and an expanded supply as a result of a partial lift of the embargo on Turkish food imports.

Overall, annual inflation will remain near 4%. Monetary policy measures will seek to keep inflation at the target in the medium term.